Formulas Flashcards

1
Q

Total costs

A

total fixed costs + total variable costs

OR

average costs x quantity

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2
Q

Total fixed costs

A

total cost – total variable costs

OR

average fixed costs x quantity

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3
Q

Total variable costs

A

total cost – total fixed costs

OR

average variable costs x quantity

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4
Q

Average cost

A

total cost / quantity

OR

average fixed costs + average variable costs

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5
Q

Marginal cost

A

△total cost / △quantity

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6
Q

Average product

A

total product / quantity of labor

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7
Q

marginal product

A

△total product / △quantity of labor

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8
Q

total revenue

A

price x quantity

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9
Q

average revenue

A

total revenue / quantity

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10
Q

marginal revenue

A

△total revenue / △quantity

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11
Q

profit

A

total revenue – total cost

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12
Q

price elasticity of demand

A

%△ quantity demanded / %△ price

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13
Q

price elasticity of supply

A

%△ quantity supplied / %△ price

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14
Q

income elasticity of demand

A

%△ quantity demanded / %△ income

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15
Q

gini coefficient

A

area between Lorenz curve and line of perfect equality / area beneath line of perfect equality

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16
Q

marshall lerner condition

A

PED(exports) + PED(imports) > 1

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17
Q

taxable income

A

total income earned – tax free allowance

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18
Q

average rate of tax

A

(total income tax paid / total income) x 100

19
Q

marginal rate of tax

A

(△total income tax paid / △total income) x 100

20
Q

subnormal profit

A

average revenue < average cost

21
Q

profit maximisation

A

marginal cost = marginal revenue

22
Q

revenue maximisation

A

marginal revenue = 0

23
Q

normal profit, sales maximisation point, economic break-even point, entry limit price

A

average cost = average revenue

24
Q

allocative efficiency

A

demand = supply,MSB = MSC,P = C

25
productive efficiency
minimum point on average cost curve = MC
26
shutdown condition
average revenue < average
27
average utility
total utility / quantity
28
marginal utility
△total utility / △quantity
29
utility maximisation
marginal utility = 0
30
social cost
private costs + external costs
31
social benefit
private benefit + external benefit
32
profit maximisation in labor market
marginal revenue product = marginal cost of labor
33
gross domestic product
Output method: sum of all goods and services produced in an economy in a year Income method: sum of factor incomes (interest, wages & salary, rent, profit) Expenditure method: total spending in an economy in a year = C + I + G (X–M)
34
consumer price index number
(current value / base year value) x 100
35
percentage change
([actual – original] / original) x 100
36
nominal GDP
quantity of goods and services produced x current prices
37
real GDP
(nominal GDP / price index) x 100 price index = CPI or GDP deflator
38
GDP deflator
(nominal GDP / real GDP) x 100
39
GNI
GDP + net income from abroad
40
green GDP
GDP – environmental costs
41
aggregate demand
C + I + G + (X–M)
42
GDP per capita
GDP / total population
43
multiplier
1 / (1–MPC)