38 terms

IB Economics Paper 3


Terms in this set (...)

Revenue maximisation point
MR = 0
Profit maximisation point
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
GDP + Net factor income
Green GDP
GDP - Environmental costs
GDP Per capita
GDP / population
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