Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

A-level Economics Yr 12 Mine > Key Equation > Flashcards

Key Equation Flashcards

1
Q

Total Cost =
(Two Answers )

A

Total Fixed Cost + Total Variable Cost (TC = TFC + TVC)

Or

AC x Q (TC = Average Cost x Quantity)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Total Fixed Cost (TFC) =

(2 solutions)

A

TFC = TC - TVC (total cost - total variable cost)

Or

TFC = AFC x Q (average fixed cost x quantity)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Total Variable Cost (TVC) =

(2 solutions)

A

TVC = TC - TFC (Total Cost - Total Fixed Cost)

Or

TVC = AVC x Q (Average Variable Cost x Q)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Average Cost (AC) =

(2 solutions)

A

AC = TC / Q (Total Cost / Q)

Or

AC = AVC + AFC (Average Fixed Cost + Average Variable Cost)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Marginal Cost (MC) =

A

MC = ∆TC / ∆Q

(Change in Total Cost / Change in Quantity)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Average Product (AP) =

A

AP = TP / Q of LABOUR

(Total Product / Quantity of Labour)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Marginal Product (MP) =

A

MP = ∆TP / ∆Q of LABOUR

(Change in Total Product / Change in Quantity of Labour)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Total Revenue (TR) =

A

TR = P x Q

(Price x Quantity)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Average Revenue (AR) =

A

AR = TR / Q

(Total Revenue / Quantity)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Marginal Revenue (MR) =

A

MR = ∆TR / ∆Q

(Change in Total Revenue / Change in Quantity)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How can you use Total Revenue (TR) simplify the equation for Average Revenue (AR)?

A

TR = P x Q

AR = TR / Q
AR = (P x Q) /Q
AR = P

(Q cancels out)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Profit =

A

Profit = TR - TC

(Total Revenue - Total Cost)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Supernormal Profit =

A

SN P = AR > AC

(Average Revenue > Average Cost)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

SUBNORMAL Profit =

A

SN P = AR < AC

(Average Revenue < Average Cost)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Profit Maximisation occurs

A

MR = MC

(Marginal Revenue = Marginal Cost)
M = Most Money

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Revenue Maximisiation =

A

MR = 0

(Marginal Revenue = 0)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Meaning of ,
AC = AR (Average Cost = Average Revenue)

A
  • Normal Profit
  • Sales Maximisation
  • Break Even (no economic profit or loss)
  • Entry Limit Price (takes way incentive joining the market)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Allocative Efficiency is where …

(3 solutions)

A

D = S (Demand = Supply)

MSB = MSC (Marginal Social Benefit = Marginal Social Cost)

P = MC (Price = Marginal Cost)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Productive Efficiency occurs …

(2 solutions)

A

Minimum Point on AC curve.

AC = MR (Average Cost = Marginal Revenue)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

X-efficiency occurs …

A

At ANY point on the AC (average cost) curve.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Dynamic Efficiency occurs…

A

Long Run Supernormal Profit is necessary.

22
Q

Minimum Efficient Scale occurs …

A

At the lowest quantity level when the AC curve stops decreasing.

23
Q

Shutdown Condition (consider and will) occurs …

A
  1. Considering to Shut Down
    AR = AVC (Average Revenue = Average Variable Cost)
  2. Will Shut Down
    AR < AVC (Average Revenue < Average Variable Cost)
24
Q

Average Utility =

A

AU = TU / Q

(Total Utility / Quantity)

25
Q

Marginal Utility =

A

MU = ∆TU / ∆Q

(Change in Total Utility / Change in Quantity)

26
Q

Utility maximisation occurs …

A

MU = 0

Marginal Utility = 0

27
Q

Social Cost (SC) =

A

SC = PC + EC

(Private Costs + External Costs)
EB can be + or -

28
Q

Social Benefit (SB) =

A

SB = PB + EB

Private Benefits + External Benefits
(EB can be + or -)

29
Q

Profit Maximisation in Labour Market occur …

A

MRP = MCL

Marginal Revenue Product = Marginal Cost of Labour

30
Q

PED (Price Elasticity of Demand) =

A

PED = % ∆QD / % ∆P

(% change in Quantity Demanded / % change in Price)

31
Q

PES (Price Elasticity of Supply) =

A

PES = % ∆QS / % ∆P

(% change in quantity supplied / % change in price)

32
Q

XED (Cross Elasticity of Demand) =

A

XED = % ∆QDa / % ∆Pb

(% change in quantity demanded of good A / % change in price of good B)

33
Q

YED (Income Elasticity of Demand) =

A

YED = % ∆QD / % ∆Y

(% change in quantity demanded / % change in income)

34
Q

What are the three ways of finding GDP?

A

Output Method - value of all good and services produced in a year

Income Method - add up all factor incomes (interest, rent, profit)

Expenditure method - add up total amount of spending (AD)

35
Q

Nominal GDP =

A

N GDP = Quantity x Current Prices

Quantity of goods and servecices made and sold

36
Q

Real GDP =

Two Solutions

A
  • RGDP = Quantity x Constant prices (prices in base years)
  • RGDP = NominalGDP / Price Index x 100
    (IMPORTANT)
37
Q

GDP Deflator =

A

GDP D = NGDP / RGDP x 100

(Nominal GDP / Real GDP x 100)

38
Q

GNI =

A

GNI = GDP + Net Factor Income

39
Q

Green GDP =

A

GGDP = GDP - environmental costs

40
Q

Aggregate Demand (AD) =

A

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

C = consumption
I = Investment
G = Government Spending
X = total exports
M = total Imports

41
Q

Multiplier =

(3 solutions)

A

Multiplier = 1 / (1 - MPC)
(MPC = Marginal Propensity Consume)

Or

Multiplier = 1 / MPS
(MPS = Marginal Propensity to Save)

Or

Multiplier = change in Y (national income)/ Change in G (GS)

42
Q

Unemployment rate =

A

UE Raté = unemployed / size of Labour force

43
Q

Index Number =

A

IN = current value / raw value in the base year x 100

44
Q

% ∆ (percentage change) =

A

% ∆= New - Original / Original x 100

45
Q

Gini Coefficient =

A

GC = Area between LC and LOPE / Total Area beneath LOPE

LC = Lorenz Curve
LOPE = Line of Perfect Equality

46
Q

Marshall-Lernes Condition occurs …

A

PEDx + PEDm > 1

47
Q

Terms of Trade =

A

Average Index Price of Exports / average Index Price of Imports x 100

48
Q

Taxable Income

A

Total Income - Tax Free Allowance

49
Q

Average Rate of Tax =

A

Total Income Tax Paid / Total Income x 100

50
Q

Marginal Rate of Tax =

A

= ∆ Total income tax pain / ∆ total income x 100

51
Q

GDP per capita.=

A

GDP / population

A-level Economics Yr 12 Mine (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions