Final formula sheet

Marginal cost _{of labor}

W/MP

MRP

MP x MR or ▲TR

→ in perfect comp: P x MP

MFC/MRC

▲T[R]C = ▲[ W x Q]

→ in perfect comp: = W

AP

TP/Q

Wage

TRC/ Q_{of labor}

TRC

W x Q or MRP added up

MP

▲ TP

Resource Combination

MP/P_{of capital} = MP/P_{of labor}

_{→ price can be MRC}

MVP

MP x P

→ in perfect comp: equals MRP

MR

→in perfect comp: equals P

TP

MP added up

Max Wage

MRP of last worker hired

Price elasticity of Demand/Supply

[new - old/ old x 100]_{demand/supply} / [new - old/ old x 100]_price

_{→ elastic: 2}

_{→inelastic: .4}

Income elasticity

▲ Q%/ ▲ income %

Marginal utility

▲ TU/ ▲ Q

Price elasticity

▲ Qd/s% / ▲P% = |x|

→ inverse relation w d

→proportional relationship w s

The default assumption is price is always 1 [e.g 2 = 2%/1%]

Cross-Price elasticity

▲Qd% _A / ▲ P% _B

_{→ ‘-’ = compliments}

_{→’+’ = substitutes}

_{→ zero = unrelated goods}

Elasticity value

x>1 = elastic

x<1 =inelastic

AVC

VC/Q

ATC

TC/Q or AFC + AVC

MP

▲TP/▲Q

MC

TC₁ - FC [TC₀] or ▲VC or = ▲TC or P

VC

AVC x Q or Adding up MC

Accounting profit

TR - Explicit cost

Economic profit

TR - [implicit + explicit = opc] or

Accounting - opc

Normal profit

Economic profit = 0

Accounting = implicit cost

→ Note: impl = opc

Benefit maximum/ optimal

MC = MB

ATC→ 3rd formula

fixed cost + MC added up [=vc] /Q

TC at Q_Zero

fixed cost

Input OPC

it/other

→ comparative adv

Output OPC

other/it

→ comparative adv

Total Utility

add up MU

Calculate tax rev in world trade

Rev = Traiff x # imported