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Accounting > Economics Formulas > Flashcards

Economics Formulas Flashcards

1
Q

What is the formula for the budget constraint?

A

1 item + other item = income

Fe 2B+3P=18

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2
Q

MRS formula in other words how many does he give up for…

A

-MU(of horizontal)/MU(vertical)

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3
Q

MRT formula

A

-P(horizontal)/P(vertical)

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4
Q

How you solve for „maximize utility“

A 
First 
Find budget constraint 
2. Tangency : MRS=MRT 
3 plug in one value of one item into budget constraint 
Then get the value for both items
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Accounting (12 decks)

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