key equations

Question 1

total cost

Answer 1

total fixed cost + total variable cost
or
average cost x quantity

Question 2

total variable cost

Answer 2

total cost - total fixed cost
or
average variable cost x quantity

Question 3

total fixed cost

Answer 3

total cost - total variable cost
or
average fixed cost x quantity

Question 4

average cost

Answer 4

total cost/quantity
or
average fixed cost x average variable cost

Question 5

marginal cost

Answer 5

change in total cost/change in quantity

Question 6

average product

Answer 6

total product/quantity of labour

Question 7

marginal product

Answer 7

change in total product/change in quantity of labour

Question 8

total revenue

Answer 8

price x quantity

Question 9

average revenue

Answer 9

total revenue/quantity
or
price

Question 10

marginal revenue

Answer 10

change in total revenue/change in quantity

Question 11

profit

Answer 11

total revenue - total cost

Question 12

supernormal profit

Answer 12

average revenue > average cost

Question 13

subnormal profit

Answer 13

average revenue < average cost

Question 14

profit maximalisation

Answer 14

marginal revenue = marginal cost

Question 15

revenue cost

Answer 15

marginal revenue = 0

Question 16

average cost = average revenue

Answer 16

normal profit
sales maximalisation point
economic break even
no longer desirable for new firms to enter bc no room for supernormal profit

Question 17

economic break even

Answer 17

no profit or loss

Question 18

allocative efficiency

Answer 18

demand = supply
marginal social benefit = marginal social cost
price = marginal cost

Question 19

productive efficiency

Answer 19

minimum point of average cost curve
average cost = marginal cost

Question 20

x efficiency

Answer 20

any point on the average cost curve

Question 21

dynamic efficiency

Answer 21

long run supernormal profits

Question 22

average utility

Answer 22

total utility/quantity

Question 23

marginal utility

Answer 23

change in total utility/change in quantity

Question 24

utility maximisation

Answer 24

marginal utility = 0

Question 25

social cost

Answer 25

private cost + external cost (+ or -)

Question 26

social benefit

Answer 26

private benefit + external benefit (+ or -)

Question 27

profit maximisation in labour markets

Answer 27

marginal revenue profits = marginal costs of labour

Question 28

price elasticity of demand (ped)

Answer 28

percentage change of quantity demanded/percentage change of price

Question 29

price elasticity of supply (pes)

Answer 29

percentage change of quantity supplied/percentage change of price

Question 30

cross elasticity of demand (xed)

Answer 30

percentage change of quantity demanded of good a/percentage change of price of good b

Question 31

income elasticity of demand

Answer 31

percentage change of quantity demanded/percentage change of income

Question 32

gdp

Answer 32

outcome + income + expenditure methods

Question 33

nominal gdp

Answer 33

quantity x current prices

Question 34

real gdp

Answer 34

quantity x constant prices
or
(nominal gdp/cpi) x 100

Question 35

ad

Answer 35

c + g + i + (x-m)

Question 36

multiplier

Answer 36

1/1 - marginal propensity to consumer

Question 37

unemployment rate

Answer 37

unemployed/labour forve

Question 38

index number

Answer 38

(current value/raw value in base year) x 100

Question 39

percentage change

Answer 39

difference between numbers/original number x 100