Studyguide for Ch4

Studyguide for Ch4 - Study guide for Chapter 4: Outline of...

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Study guide for Chapter 4: Outline of knowledge points: 1. Understand what is a price ceiling, price floor, and the likely consequences of this intervention. 2. Calculate various types of elasticities and interpret the results. 3. Explain the difference between elastic, inelastic, and unitary elastic demand. 4. Describe how price elasticity of demand helps us predict how total revenue will change in response to a change in price. 5. Explain why elasticity is not constant, but rather varies as one moves along a straight-line demand curve. 6. List the determinants of price elasticity of demand and explain their effects. 7. Use income elasticity of demand to identify normal goods, inferior goods, economic necessities, and economic luxuries. 8. Use cross price elasticity of demand to identify pairs of complements and substitutes. 9. Explain what it means for supply to be elastic , inelastic , or unitary elastic . 10.
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Studyguide for Ch4 - Study guide for Chapter 4: Outline of...

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