Useful Equation – Microeconomics - Econ 2302
1. Slope = ∆Y/∆X = Y2-Y1/X2-X1
2. Consumer Surplus = Maximum buying price - Price paid
3. Producer Surplus = Price received - Minimum Selling price
4. Total Surplus = Producer surplus + consumer surplus
5. Ed = % ∆Qd /% ∆P = (∆Q/Q average) / (∆P/P Average)
6. Percentage change in quantity demanded of one good
Ec = -------------------------------------------------------------------------------------
Percentage change in price of another good
7. Ey = Percentage change in quantity demanded /Percentage change in income
8. Es = Percentage change in quantity supplied/percentage change in price
9. Profit = Total revenue (P x Q) - Total cost (C x Q)
10. Accounting Profit = Total revenue - Explicit costs.
12. Economic Profit = Total revenue - Total cost (Explicit costs + implicit costs).
13. MPP = ∆Q/∆L
14. TC = TFC + TVC
15. ATC = AFC + AVC
16. MC = ΔTC/Δ Q.
17. W/MPP = MC
18. AP of Labor = Q/L
19. AFC = TFC / Q.
20. AVC = TVC / Q.
21. ATC = TC/Q or ATC = AFC +AVC
22. MR = ∆TR/∆Q
23. CS = Maximum Buying Price - Price Paid
24. MSC = MPC + MEC
25. MSB = MPB + MEB
26. PV = An /(1+i)n
27. PV = ∑An /(1+i)n
28. Dividends x shares = Shareholder income
29. Yield = Annual Coupon Payment / Bondprice x 100
30. Yield = dividend per share/closing price per share
31. P-E ratio = closing price per share/net earnings per share
32. The face value x the coupon rate = the annual coupon payment.
33. Interest income = interest rate x principal
34. Payment in the year of maturity of Bond = Principal + interest income earned on that specific year.