Important Microeconomic Formulas Total Product = Quantity (Q) Average Product (AP) = Total Product (Q) / Labour (L) Marginal Product (MP) = Change in Total Product / Change in Labour Profit = Total Revenue (TR) – Total Costs (TC) Profit = (Average Revenue – Average Cost) x Quantity Total Revenue (TR) = Price (P) x Quantity (Q) Total Costs (TC) = Total Fixed Costs (TFC) + Total Variable Costs (TVC) Total Cost (TC) = Average Cost (AC) x Quantity (Q) Average Cost (AC) = Total Costs (TC) /
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Aqsa Kiran Prof. Moinul Islam 7th Feb‚ 2015 Intermediate Microeconomics PPE-3100 Home Work -1 1. Suppose a teenager has $20 and likes both rap music (R) and country music (C) with a set of preferences so that U = C1/2R1/2. Suppose that the iTunes price of a rap music song is and the price of a country music song is. Find optimum levels of R and C. What is the greatest level of affordable utility (Use Lagrange method)? U = C^1/2 R ^1/2 Constrain = Pc +PR = 20 Applying Lagrange Method
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Considering the elements of microeconomics‚ create a list of three (3) best practices that would benefit any small business or start-up. Explain your rationale. The element of microeconomics is every business endeavor is an exchange between a buyer and a seller. Understanding the factors that determine demand and supply is the first best practice that would benefit a small business startup. The demand reflects the willingness and ability of buyers to purchase goods and services at different prices
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Ch1: The Fundamentals of Managerial Economics * Managerial Economics is the application of microeconomic theory to business decision-making. Revenue‚ costs‚ and profits * Revenue(TR=total revenue) is gross inflow of money to firm from producing and selling a good * Costs = 2 kinds of production costs 1. Explicit costs: all costs requiring the firm to pay money to someone (out of pocket costs) 2. Implicit costs: the opportunity costs to the firm of using inputs it owns(land
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each individual firm has on the market price due to its small market share. The second assumption is that the market is characterised by free entry and exit meaning that new firms can enter and exit the market without any restrictions on the process and thus‚ without incurring any special costs. Special costs would be costs that the new firms have to pay although the incumbents did not. Furthermore‚ the output of the firms is homogeneous meaning that the goods are identical to the consumer and therefore
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Microeconomics Vocabulary |Word |Definition | |Market |A market is any situation or place that enables the buying and selling of goods and| | |services | |Perfect Competition |Perfect competition is a market structure
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Gujarat University‚ Ahmedabad – MBA Programme Details of the Courses Offered Annexure E Course Code: C101 Economics for Managers (EFM) 1. Course Objective This course is designed to impart knowledge of the concepts and principles of Economics‚ which govern the functioning of a firm/organisation under different market conditions. It further aims at enhancing the understanding capabilities of students about macro–economic principles and decision making by business and government. 2. Course Duration
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Economics & Theory • Managerial economics applies microeconomic theory to business problems • How to use economic analysis to make decisions to achieve firm’s goal of profit maximization Theory of the Firm • Expected Value Maximization • Owner-managers maximize short-run profits. • Primary goal is long-term expected value maximization. • Constraints and the Theory of the Firm • Resource constraints. • Social constraints • Microeconomics • Study of behavior of individual economic agents
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Microeconomics Freakonomics Real Estate Incentives apply to any business application you can think of because people respond to incentives. Incentives are what run humans and may times we act on incentives. An example would be if you own a bakery and everyday you make three-hundred cupcakes and you want increase production by another hundred you offer an incentive being that for every twenty extra cupcakes made there will be a five-hundred peso bonus. Using an incentive will not only increase
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BD103 Microeconomics TUTORIAL Questions on Market Structure Section A – Multiple Choice Q1 Which market model has the least number of firms? (a) Monopolistic competition (b) Perfect competition (c) Monopoly (d) Oligopoly Q2 Perfect competitive firms maximize: (a) Total profits by producing where price exceeds average total cost by the greatest amount (b) Per unit profits by producing where marginal revenue equals marginal cost (c) Total profits by producing where price equals marginal cost (why
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