Economics Class Test 1 Flashcards
What is the product rule?
dy/dx = u’v + uv’
What is the quotient rule?
dy/dx = (u’v-uv’)/v^2
What is the formula for Elasticity of Demand?
(dQd/dp)*(p/Qd)
What is the formula for Elasticity of Supply?
(dQs(p)/dp)*p/q
When is profit maximised?
When MC = MR
What are the formulas for Marginal Revenue and Cost?
MR = dTR/dq and MC = dTC/dq
What are the formulas for MPl and MPk?
MPl = d Q/dL and MPk = dQ/dK
How do you find the MRS of a utility curve?
Find the ratio of the two utilities
What is the Substitution Effect?
As the wage rate increases, the opportunity cost of not doing labour increases, hence the worker increases the amount of labour they do
What is the income effect?
As the wage rate increases, so does one income, so one has less necessity to work, so one will work less
What is an Isoquant?
This represents a constant quantity produced using different
technological combinations of Labour and Capital.
What is an Isocost line?
These represent different examples of the firm’s “budget” to be
spent on capital and labour
What is the Cost Function?
Cost Function is a function which takes as arguments the input prices and the desired amount of output to be produced and returns the minimum cost of producing this amount of output
What is a Monopsony and Oligopoly?
A Monopsony is when there is a sole buyer in the market.
An Oligopoly is when there is a few buyers in the market.
When is profit maximised in a Monopsonist market?
When, MCl= MRPl
