### Economic Formulas

The following formulas are used in economics classes.
Macroeconomics
 Consumer Price Index                                                                               Base Year Quantities x Current Year Prices  x 100 = CPI   Base Year Quantities x Base Year Prices    Cross Price Elasticity of Demand                                                               Percentage Change in Quantity Demanded of Good X         Percentage Change in Price of Good Y    Elasticity of Supply                                                                                    Percentage Change in Quantity Supplied        Percentage Change in Price    GDPGDP                                                                                                    Expenditure Method:      C + I + G + X - M = GDP      C + I + G + Xn = GDP   Income Method: NI + Depreciation + Indirect Taxes - Subsidies + Net Income of Foreigners = GDP    Real GDP                                                                                                    Nominal GDP                                                                       x 100 CPI for the same year as the nominal figure OR GDP deflator for the same year as the nominal figure    GDP Deflator                                                                                             Current Year Quantities x Current Year Prices x 100 Current Year Quantities x Base Year Prices

Unemployment Rate

number of unemployed x 100 = UR

labor force

Labor Force Participation Rate

number in labor force x 100 = LFPR

Labor Force                                           Labor Force

Employed + Unemployed = Labor Force

Microeconomics

Allocative Efficiency

Price = Marginal Cost (P = MC) or
Marginal Social Benefit = Marginal Social Cost (MSB = MSC)

Average Fixed Cost

Average Fixed Cost (AFC) = Total Fixed Cost (TFC)

Quantity of Output (Q)

Average Product

Average Product (AP) = Total Production

Quantity of Input

Average Profit

Average Profit = Total Profit

Quantity (Q)

Average Revenue

Average Revenue (AR) = Total Revenue (TR)

Quantity (Q)

Average Total Cost

Average Total Cost (ATC) = Total Cost (TC)

Quantity of Output (Q)

Average Variable CostAverage Variable Cost

Average Variable Cost (AVC) = Total Variable Cost (TVC)

Quantity of Output (Q)

Cross Price Elasticity of Demand

Percentage change in quantity demanded of Good A

Percentage change in price of Good B

Distributive Efficiency Condition

Marginal Utility of food (MUF)  =  Marginal Utility of clothes (MUC)

Price of food (PF)                               Price of clothes (PC)

Elasticity of Demand

Percentage change in the quantity demanded

Percentage change in price

Elasticity of Supply

Percentage change in the quantity supplied

Percentage change in price

Factor of Production Hiring Rule

Marginal Revenue Product (MRP) = Marginal Resource Cost (MRC) or

Marginal Revenue Product (MRP) = Marginal Factor Cost (MFC)

Gini Coefficient

Marginal Cost

Marginal Cost = Change in Total Cost (ΔTC) = Change in Total Variable Cost (ΔTVC)

Change in Quantity (ΔQ)          Change in Quantity (ΔQ)

Marginal Product of Labor

Marginal Product of Labor (MPL) = Change in Total Product (ΔTP)

Change in Labor (ΔL)

Marginal Revenue

Marginal Revenue (MR) = Change in Total Revenue (ΔTR)

Change in Quantity (ΔQ)

Marginal Revenue Product of Labor

Marginal Revenue Product of Labor (MRPL) = Marginal Product of Labor (MPL) x Marginal Revenue of output (MRoutput)