econ equations Flashcards
what is the douglas cobb function
AL^aK^b
what is the MRS formula of the douglas cobb function
-bL/aK
how does MRS relate to marginal utility
MRS = -MUl/MUk
what is the budget constraint function
PyY+PxX
how does MU relate to price
MUy/Py = MUx/px
APL formula
APL = q/L
what is the cost function
c = wL + rK
how do w and r relate to mrts
w/r = MPL/MPK = -MRTS
what is the elasticity of residual demand
Ei = nE - (n-1)Ns
how do you find the price of a cournot eq.
a+nm/n+1
how do you find the q of a cournot eq.
a-m/b(n+1)
what is a formula for profit involving p,mc and q
prof = (P1-MC1)q1
what is the stackelberg eq. quantity for a leader
q1 = a-m/2b
what is the stackelberg eq. quantity for a follower
q2 = a-m/4b
what is the last dollar rule
MPL/w = MPK/r
what does it mean when the powers in the douglas cobb function x>1, x<1 x=1
x>1 increasing returns to scale
x<1 decreasing returns to scale
x=1 constant returns to scale
what is the tax incidence
dp/dt
what relation does mc have to w and MPL
MC = w/MPL
MRTs formula for a douglas cobb function
aq/L/bq/K
for a monopoly PM point
MR = MC
for a perfect competition PM point
P = MC
MR =?
DR/DQ
MC =?
DC/DQ
TR =
PQ
MRPL=
MR x MPL
equilibrium point for labour
MRPL = P x MPL = w
MRT =
MCx/MCy
MRTS =
-dk/dl = MPL/MPK
