Chapter 7 - Micro Chapter 7 Consumer Choice and Elasticity...

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Unformatted text preview: Micro Chapter 7 Consumer Choice and Elasticity This chapter is an extension of the first part of Chapter 3 on demand and consumer theory Refer back to your Chapter 3 notes and mentally combine them with Chapter 7 notes 6 Learning Goals 1) List the key factors influencing consumer behavior (repeat from Chapter 3 and on your own) 2) Apply the concept of marginal utility to determine how a demand curve is derived (repeat from Chapter 3 and on your own) 3) Define, calculate, and graph elasticity of demand 4) Relate demand elasticity to total revenue 5) Define and calculate income elasticity 6) Define and graph elasticity of supply Elasticity of Demand Law of demand states that if price rises (falls), quantity demanded falls (rises) Elasticity gives us more information about the consumer Price elasticity seeks to quantify how much quantity demanded falls (rises) Other questions to consider: By how much does price need to rise to decrease quantity demanded by X%?...
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This note was uploaded on 04/02/2012 for the course ECO 2023 taught by Professor Joecalhoun during the Spring '12 term at Florida State College.

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Chapter 7 - Micro Chapter 7 Consumer Choice and Elasticity...

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