Equations

Question 1

Marginal Utility

Answer 1

Difference in total utility/change in quantity.

Question 2

Price Elasticity of demand

Answer 2

PED = %Change in QD/ %change in P

Question 3

Income elasticity of demand

Answer 3

YED = %Change in QD/ %change in income.

Question 4

Cross Elasticity of demand

Answer 4

XED = %change QDa/ %change Pb

Question 5

Price Elasticity of supply

Answer 5

PES = %changeQS/%changeP

Question 6

Consumption Externalities

Answer 6

MSB = MPB + MEB

Question 7

Production Externalities

Answer 7

MSC = MPC + MEC

Question 8

Revenue

Answer 8

TR = price x quantity

Question 9

productivity

Answer 9

Total output / Total workers

Question 10

Marginal cost

Answer 10

Change in TC/ Change in Q

Question 11

Real GDP

Answer 11

Nominal GDP/Inflation Index x 100

Question 12

GDP per capita

Answer 12

Total GDP/population

Question 13

Unemployment rate

Answer 13

No. of unemployed/labour force population

Question 14

Aggregate Demand

Answer 14

AD = C + I + G + (X-M)

Question 15

Multiplier

Answer 15

1/ (1-MPC)

Question 16

National income

Answer 16

Change in NI = multiplier x injection

Question 17

Quantity theory

Answer 17

MV = PQ

Question 18

Bond yields

Answer 18

yield = coupon/market price of bond x 100.

Question 19

MPC

Answer 19

change in consumer spending/ change in income

Question 20

MPS

Answer 20

change in saving/ change in income.