midterm formulas economics

Real GDP

$ IS CONSTANT

Growth rate formula

new - old / old *100

CAGR

(new / old )^1/n - 1 × 100 (use -1 year in the base!)

GDP Deflator

nominal GDP / real GDP

Inflation rate

CPI t - CPI t-1 / CPI t-1

CPI

new basket / old basket

opportunity cost

how much A is sacrificed for 1 B

Patero efficent

BOTH are worse OFF (ALL other options are worse off so neither want to move)

AGR

rGDP t - rGDP t-1 / rGDP t-1

Slope of feasible frontier/ indifference curve

consumption / hours

Relationship between MRS & MRT

| - MRS | = | - MRT |

Balance an equation

pC + wL = pC + wL

How to read a game box

Top down → person on the LEFT

Side to side → person on the RIGHT

Steeper vs flatter

Steeper = HIGHER wage

Flatter = HIGHER price of energy

Dominant Strategy

NOT reliant on the behavior of alternate players, a move made for ones OWN benefit

Isocost line edited

C = B / p - w / p * L