1 Flashcards
Marginal product of labour
Change in output/ Change in labour
Average product of labour
Output/ Labour
Total costs
Fixed costs + variable costs
Fixed costs
Remain constant
Variable costs
Wage rate x number of workers
Average total cost
Total cost/ quantity
Marginal Average Cost
Change in total cost/ Change in quantity
Profit
Total revenue - Total cost
Total revenue
Price x Quantity
Elasticity of demand
Change in quantity demand/ Quantity x 100
/
Change in price/ Price x 100
Average revenue
Total revenue/ Quantity
Marginal revenue
Change in total revenue/ Change in quantity
Economic profit
(Price - Average cost) x Quantity
Government tax revenue
Tax size x quantity
Marginal social cost
Marginal private cost + Marginal external cost
Deadweight loss calculation
1/2 x (Excess Quantity) x (per unit external cost at excess quantity)
Pigovian tax
Equal to MEC at socially optimal output
Enforced compensation
Equal to MEC at the private cost output
