Which of the Following Stock Market Increases Is Best Explained

question 21

Multiple Choice

Which of the following stock market increases is best explained by the notion of a bubble?

• A)The late 1982 rally in which the DJIA doubled in 4 months.
• B)The decade of the 1980s.
• C)The U.S. stock market in technology stocks the late 1990s.
• D)The U.S. stock market's growth in 2009.

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Definitions:

Public Good

A product or service that is non-excludable and non-rivalrous, meaning it can be used by anyone without diminishing its availability to others.

Allocative Efficiency

The apportionment of resources among firms and industries to obtain the production of the products most wanted by society (consumers); the output of each product at which its marginal cost and marginal benefit are equal, and at which the sum of consumer surplus and producer surplus is maximized.

Marginal Costs

The additional cost incurred by producing one more unit of a good or service, crucial for making production and pricing decisions.

Marginal Benefits

The incremental satisfaction or benefit a consumer derives from consuming an additional unit of a good or service.