Economics Formulas

Consumer and Producer Surplus Formula

Reference for consumer and producer surplus formulas. Covers how market price affects buyer and seller gains in supply and demand equilibrium analysis.

Marginal Utility Formula

Calculate marginal utility using MU = ΔTU/ΔQ. Learn how to measure the additional satisfaction from consuming one more unit.

Comparative Advantage Formula

Calculate comparative advantage using opportunity cost. Determine which country should produce which good for mutual trade benefit.

Laspeyres Price Index Formula

Calculate the Laspeyres Price Index to measure price changes over time using base-period quantities. Includes worked examples.

Lorenz Curve and Gini Coefficient

Understand the Lorenz curve and calculate the Gini coefficient: G = 1 - 2 times the integral of L(x). Measures income inequality.

Marginal Revenue

Marginal revenue formula MR = ΔTR / ΔQ measures revenue from each additional unit sold. Key for pricing decisions, profit maximization, and market analysis.

Velocity of Money

Calculate money velocity using V = PQ/M from the quantity theory of money. Measures how quickly currency circulates and what changes in velocity indicate.

Break-Even Point Formula

Calculate the break-even point where total revenue equals total costs. Find how many units you must sell to cover fixed and variable costs.

Compound Interest Formula

Calculate compound interest with A = P(1+r/n)^nt. See how principal, rate, and compounding frequency grow your money over time.

Continuous Compound Interest Formula

The continuous compounding formula A = Pe^rt calculates growth when interest compounds infinitely often. Uses Euler's number e.

Depreciation Formulas

Straight-line and declining balance depreciation formulas for accounting and tax purposes. Calculate asset value over time with examples.

Fiscal Multiplier Effect

The fiscal multiplier formula k = 1/(1-MPC) shows how government spending or tax changes amplify their impact on total economic output.

Fisher Equation

The Fisher equation relates nominal interest rates, real interest rates, and inflation. Learn the formula with economic examples.

Gini Coefficient Formula

The Gini coefficient measures income inequality on a scale from 0 to 1. Learn the formula based on the Lorenz curve with examples.

Phillips Curve

The Phillips Curve describes the inverse relationship between inflation and unemployment, showing the tradeoff policymakers face.

Present Value Formula

Reference for the present value formula PV = FV / (1+r)^n. Calculate what any future sum is worth today using discount rate tables and worked examples.

Price Elasticity of Demand

The price elasticity of demand measures how quantity demanded changes with price. Essential for pricing strategy and economics.

Price Elasticity of Demand

Reference for price elasticity of demand: PED = %ΔQ / %ΔP. Covers elastic, inelastic, and unit elastic goods with the midpoint method formula.

Return on Investment (ROI) Formula

The ROI formula calculates the percentage return on an investment relative to its cost. Essential for comparing investments.

Solow Growth Model

The Solow growth model explains long-run economic growth through capital accumulation and technology. Learn the formula with examples.

Supply and Demand Equilibrium

Reference for supply and demand equilibrium formulas. Solve for price and quantity from linear functions with worked examples and elasticity calculations.

Time Value of Money Formulas

TVM formulas for present value, future value, and annuities. Understand how money changes value over time with worked examples.

Consumer Price Index (CPI) Formula

Calculate CPI using (Cost of basket in current year / Cost in base year) × 100. Tracks inflation and changes in purchasing power over time with worked examples.

Exchange Rate Conversion Formula

Reference for the currency conversion formula and cross-rate calculation. Covers bid-ask spread, real vs nominal rates, and purchasing power parity.

GDP Formula

Calculate Gross Domestic Product using the expenditure approach C+I+G+NX. The primary measure of a country's total economic output and year-over-year growth.

Inflation Rate Formula

Reference for inflation rate = ((CPI_new - CPI_old) / CPI_old) x 100. Explains real vs nominal values and purchasing power erosion over time.

Marginal Cost Formula

Reference for MC = ΔTC / ΔQ. Covers average cost relationship, fixed vs variable costs, and profit-maximizing output where MC equals marginal revenue.

Supply and Demand Equilibrium

Calculate equilibrium price and quantity from linear supply and demand functions. Covers consumer surplus, producer surplus, and price floors and ceilings.