Micro Formulae

Created by

Toby Landes (GRK7)

Cards (39)

Total cost 
Total fixed cost plus total variable cost
Total fixed cost 
Total cost minus total variable cost
Total variable cost 
Total cost minus total fixed cost
Average cost 
Total cost divided by quantity
Average fixed cost 
Total fixed cost divided by quantity
Average variable cost 
Total variable cost divided by quantity
Marginal cost 
Change in total cost divided by change in quantity
Total revenue 
Price multiplied by quantity
Marginal revenue 
Change in total revenue divided by change in quantity
Total product 
Average product multiplied by quantity of labor
Average product 
Total product divided by quantity of labor
Marginal product 
Change in total product divided by change in quantity of labor
Returns to scale 
Increasing: Percentage change in output > Percentage change in input
Constant: Percentage change in output = Percentage change in input
Decreasing: Percentage change in output < Percentage change in input
Profit 
Total revenue minus total cost
Average revenue minus average cost
Super normal profit 
Total revenue greater than total cost
Average revenue greater than average cost
Subnormal profit (loss) 
Total revenue less than total cost
Average revenue less than average cost
Normal profit (break-even) 
Total revenue equals total cost
Average revenue equals average cost
Profit maximization 
Marginal revenue equals marginal cost
Revenue maximization 
Marginal revenue is zero
Sales maximization 
Average revenue equals average cost
Allocative efficiency 
Demand equals supply
Marginal benefit equals marginal cost
Marginal social benefit equals marginal social cost
Productive efficiency 
Firm operating at lowest point on average cost curve
efficiency 
Firm minimizing waste and cost at any given quantity
Dynamic efficiency 
Long-run supernormal profit reinvested
Minimum efficient scale 
Minimum output level where all economies of scale are fully exploited
Shutdown condition 
Average revenue equals average variable cost
Concentration ratio 
N (number of firms) and their total market share
Total utility 
Average utility multiplied by quantity
Average utility 
Total utility divided by quantity
Marginal utility 
Change in total utility divided by change in quantity
Utility maximization 
Marginal utility is zero or equal to price
Price elasticity of demand 
Percentage change in quantity demanded / Percentage change in price
Price elasticity of supply 
Percentage change in quantity supplied / Percentage change in price
Cross-elasticity of demand 
Percentage change in quantity demanded of good A / Percentage change in price of good B
Income elasticity of demand 
Percentage change in quantity demanded / Percentage change in income
Percentage change 
(Difference between two numbers) / Original number x 100
Index number 
Raw number / Base raw number x 100
Profit maximization in labor market
Employ workers up to where marginal revenue product equals marginal cost of labor
Gini coefficient 
Area between Lorenz curve and line of perfect equality / Total area beneath line of perfect equality