Economics Ch. 4 Study Guide

1. What are the three characteristics of a demand curve?
2. What does it mean when the demand for a product is inelastic?
3. What is one good that can be considered a compliment for another?
4. What are two goods that can be considered substitutes?
5. What would happen to the demand curve for Metallica CDs if they become unpopular because people find out they don’t even play their own instruments?
6. What would happen to the revenue of a DVD rental store if the demand is highly elastic and the prices go up?
7. Name a good with elastic demand at its current price.
8. Why is demand for home heating fuels inelastic in cold weather?
9. How do we calculate total revenue?
10. What are the four factors that affect elasticity?

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