econ calculations for paper 3 (micro and macro)

PED

YED

PES

profit

total revenue - total costs

abnormal profit

average revenue (AR) > average costs (AC)

normal profit

AR = AC

loss (negative profit)

AR < AC

Marginal cost (MC)

Marginal revenue (MR)

Average cost (AC)

Average revenue (AR)

Total cost (TC)

Total revenue (TR)

price x quantity

profit maximisation quantity

when MC = MR

revenue maximisation

when MR = 0

allocative efficiency

demand (MB) = supply (MC)

MSB = MSC

P = MC

productive efficiency

AC = MC (minimum point on AC curve)

average product (AP)

marginal product (MP)

marginal utility

average utility

utility maximisation

marginal utility = 0

social cost

private costs + external costs

social benefit

private benefit + external benefit

GDP/AD

C + I + G + (X - M)

nominal GDP

quantity of goods and services produced x current prices

Real GDP

(nominal GDP/price deflator*) x 100

*CPI

GDP deflator

(nominal GDP/real GDP) x 100

GNI

GDP + net income from abroad (income from abroad - income sent abroad)

GDP per capita

GDP/total population

unemployment rate

(unemployed*/labour force*)x100

*unemployed - looking for a job but not employed

*labour force - unemployed and employed

index number (CPI)

(current value/raw value (in base year)) x100

percentage change

((final - original)/original) x100

gini coefficient

area between lorenz curve and line of perfect equality (A)/area under line of perfect equality (A+B)

rate of economic growth

((GDP 2 - GDP 1)/GDP 1) ×100

inflation rate

((CPI 2 – CPI 1)/ CPI 1) x 100

construct a lorenz curve from income quintile data

average tax rates

real interest rate

nominal interest rate - rate of inflation

% change in real income/purchasing power

% change in nominal income - % change in the price level/inflation rate

indirect tax

r = tax rate, S = amount available for purchases

marginal tax rate