38 terms

Stephen_MorlingTEACHER

Revenue maximisation point

MR = 0

Profit maximisation point

MC = MR

Profit

Total revenue - total cost

Supernormal profit

Average revenue > average costs

Subnormal profit

Average revenue < average costs

Normal profit

Average revenue = average costs

Break even point

Average revenue = average total cost

Long-run shut down price

Average revenue = average total cost

Short-run shut down price

Average revenue = average variable cost

Allocative efficiency

Price = Marginal cost (MSB = MSC)

Productive efficiency

Average cost = marginal cost (minimum of ATC curve)

Minimum efficiency scale

Lowest quantity where AC stops decreasing

Average product

Total product / quantity of labour

Marginal product

Change in total product / change in quantity of labour

Total revenue

Price x quantity

Average revenue

Total revenue / quantity of output

Marginal revenue

Change in total revenue / change in quantity

Total cost

Total fixed cost + total variable cost (or average cost x quantity)

Total fixed cost

Total cost - total variable cost ( or average fixed cost x quantity)

Total variable cost

Total cost - total fixed cost ( or average variable cost x quantity)

Average cost

Total cost / quantity (AFC+AVC)

Marginal cost

Change in total cost / change in quantity

Index number

(current value / raw value base year) x 100

Percentage change

(New value - old value) / old value x 100

GDP - output approach

Value of all goods and services

GDP - Income approach

All factors of income added

GDP - expenditure approach

consumption + investment + government spending + net exports

Nominal GDP

Quantity x current prices

Real GDP

Nominal GDP / Price Index x 100

GDP Deflator

Nominal GDP / Real GDP x 100

GNI

GDP + Net factor income

Green GDP

GDP - Environmental costs

GDP Per capita

GDP / population

Multiplier

1 - (1 - MPC) or 1 / (MPS + MST + MPM)

Unemployment rate

Number of people unemployed / Labour force

Gini coefficient

Area between LC and PE / Total area under PE

Terms of trade

Avrage index price exports / average index price imports

Average tax rate

Total tax paid / Total income x 100