The Extraordinary Run Up in Stock Prices During the Late

question 18

Multiple Choice

The extraordinary run up in stock prices during the late 1990s primarily affected

• A) energy stocks.
• B) retail stocks.
• C) pharmaceutical stocks.
• D) technology stocks.

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Definitions:

Normal Good

A type of good for which demand increases as the income of the consumer increases, showing a direct relationship between income and demand.

Income Elasticity

A measure of how much the demand for a good responds to a change in consumers' income.

Total Revenue

The total income generated by a firm from the sale of goods or services before any costs or expenses are subtracted.

Income Elasticity

A measure of how much the demand for a good or service changes in response to changes in consumer income.