The Dow Jones Industrial Average (DJIA) Consists of 30 Stocks

question 71

Multiple Choice

The Dow Jones Industrial Average (DJIA) consists of 30 stocks whose price behavior

• A) typically has little correlation with the rest of the stock market.
• B) broadly reflects the overall price behavior of the stock market.
• C) reflects the changes in value of manufacturing stocks only.
• D) leads the movements in the general economy by one to two weeks.

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Definitions:

Elasticity of Supply

A measure of how much the quantity supplied of a good or service changes in response to a change in price.

Factor of Production

Inputs used in the production of goods or services, typically categorized into land, labor, capital, and entrepreneurship.

Cross Elasticity of Demand

The ratio of the percentage change in quantity demanded of one good to the percentage change in the price of some other good. A positive coefficient indicates the two products are substitute goods; a negative coefficient indicates they are complementary goods.

Inferior Goods

Goods for which demand decreases as the income of the consumer increases, as they are typically replaced with more expensive alternatives.