Microeconomics and Macroeconomics Formulas

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Questions and Answers

What formula represents the Average Total Cost (ATC)?

ATC = TVC + TFC

ATC = AFC + AVP

ATC = MC + AFC

ATC = TC/Q (correct)

Economic Profit is calculated as Total Revenue minus Total Explicit Cost only.

False

What is the formula for the Unemployment Rate?

Unemployment Rate = [# of Unemployed/LF] × 100

The formula for Marginal Cost (MC) is __.

MC = ΔTVC/ΔQ = ΔTC/ΔQ Signup and view all the answers

Match the following economic terms with their definitions:

Gross Income = Total income from rents, wages, interests, and profits Economic Profit = Total Revenue minus Total Costs (explicit and implicit) GDP Gap = Difference between potential and actual GDP Unemployment Rate = Percentage of the labor force that is unemployed Signup and view all the answers

What does the formula ϵP = %ΔQd / %ΔP represent?

Price elasticities of demand Signup and view all the answers

The Average Variable Cost (AVC) is calculated as Total Variable Cost divided by output quantity (Q).

True Signup and view all the answers

At equilibrium, Aggregate Expenditure (AE) equals __.

GDP Signup and view all the answers

What is the formula for calculating Labour Productivity?

Q/L Signup and view all the answers

The Participation Rate is calculated by dividing the Labor Force by the Working Age Population.

True Signup and view all the answers

What does the Money Multiplier represent?

It represents the maximum amount of money that a bank can create with each dollar of reserves. Signup and view all the answers

The formula for Excess Reserves is: Actual Reserves - ______

Target Reserves Signup and view all the answers

What is the equation for Aggregate Demand (AD)?

AD = C + Ig + G + XN Signup and view all the answers

The formula for the Money Multiplier is given as Δ Deposits / Δ Reserves.

True Signup and view all the answers

Calculate the Real Interest Rate if the Nominal Interest Rate is 5% and the Inflation Rate is 2%.

3% Signup and view all the answers

What components are included in the GDP formula GDP = C + Ig + G + XN?

Consumption, Investment, Government spending, Net Exports Signup and view all the answers

The CPI formula is used to calculate the overall price level in the economy.

True Signup and view all the answers

What is the formula to calculate the Inflation Rate?

CPIYr2 − CPIYr1 / CPIYr1 × 100 Signup and view all the answers

The GDP Deflator is calculated by dividing __________ by Real GDP.

Nominal GDP Signup and view all the answers

Match the following economic concepts with their definitions:

GDP Growth = Percentage increase in GDP over time Nominal Income = Income measured at current prices Real Income = Income adjusted for inflation Natural Rate of Unemployment = Long-term average unemployment rate in an economy Signup and view all the answers

Which of the following correctly describes how to calculate Real GDP Per Capita?

Real GDP divided by total population Signup and view all the answers

The formula for calculating the __________ uses the change in nominal income and the inflation rate.

Percentage change in Real Income Signup and view all the answers

What does the term 'RGDPPC' stand for and represent?

Real GDP per Capita; it represents the average economic output per person, adjusted for inflation. Signup and view all the answers

Study Notes

Microeconomics Formulas

Per unit opportunity cost = what you give up / what you get
Per unit opportunity cost = Cost / Gain
€Ρ = %∆Qd / %ΔΡ [(Q2-Q1)/((Q2+Q1)/2)] [(P2-P1)/((P2+P1)/2)]
Απ = Τπ/Q
€S = %∆Qs/%ΔΡ [(Q2-Q1)/((Q2+Q1)/2)] [(P2-P1)/((P2+P1)/2)]
Slope = ARise / ΔRun = AQ
€Y = %∆Qd / %ΔΥ [(Q2-Q1)/((Q2+Q1)/2)] [(Y2-Y1)/((Y2+Y1)/2)]
AP₁ = TP/L= Q/L
€ΑΒ = %∆Q&A / % ΔΡΒ [(QA2-QA1)/((QA2+QA1)/2)] [(Рв2-PB1)/((PB2+PB1)/2)]
TC= Explicit cost + Implicit Cost
Accounting π = TR – Total Explicit Cost
Economic Profit = TR-[Explicit Cost + Implicit Cost]
TP = Q
MP₁ = ΔΤΡ/AL= ∆Q/AL
TC = TFC + TVC
AVC= TVC/Q
AFC =TFC/Q
ATC = AC =TC/Q
ATC =AFC+AVC
MC = ΔTVC/ΔQ= ΔTC/ΔQ
MC = ATVC/AQ= ATC/AQ
ΣΜC = TVC
TR = P x Q
AR =TR/Q
MR =ΔTR/ΔQ
Απ = AR-ATC =Τπ/Q
Μπ =ΔΤπ/ΔΟ

Macroeconomics Formulas

Gross Income = Y=Yp = Rent + Wages + Interest + Profit
YƉ=Y-T + Tr
YD=C+S
At Equilibrium: S + T-Tr +IM = Ig+X+G
At Equilibrium: AE = GDP =Y
GDP = C+I+G+XN
XN=X-IM
Unemployment Rate = [# of Unemployed/LF] × 100
GDP Gap = Potential GDP (YFE) - Actual GDP (Real or Nominal)
GDP GAP = 2.5 × Cyclical Unemployment Rate × Actual GDP (Real or Nominal)
Cyclical Unemployment Rate = Actual Unemployment Rate -Natural Rate of Unemployment
CPI = (Cost of basket in a given Year / Cost of basket in base Year) ×100
Inflation Rate = (CPIYr2 - CPIYr1 / CPIYr1) ×100
GDP Deflator = (Nominal GDP / Real GDP) x 100
Real Value = (Nominal Value in Year A / Price Index in Year A) × Price Index in Year B
GDP Growth = (GDPYr2 - GDPYr1 / GDPYr1) ×100
RGDP Per Capita = Real GDP/Population
(Economic) Growth Rate = (RGDPPCYr2 - RGDPPCYr1 / RGDPPCYr1) × 100
Labour Productivity = Output per period / Units of Labour
Participation Rate = [LF/Working Age Population] × 100

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Description

This quiz focuses on essential formulas used in microeconomics and macroeconomics. It covers concepts such as opportunity cost, total cost, economic profit, and gross income equations. Test your understanding and apply these formulas to real-world economic situations.