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AO1 Worksheet 2 Formulae

The document provides formulae for various economic terms: PED, MED, CED, TOT, labour productivity, Gini coefficient, unemployment rate, MRT, ART, MPC, MPT, MPM, APC, APS, expenditure multiplier, real income, GDP deflator, unit labour cost, MC, AP, MRP, MP, and MEW are all defined using mathematical formulae.

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125 views4 pages

AO1 Worksheet 2 Formulae

The document provides formulae for various economic terms: PED, MED, CED, TOT, labour productivity, Gini coefficient, unemployment rate, MRT, ART, MPC, MPT, MPM, APC, APS, expenditure multiplier, real income, GDP deflator, unit labour cost, MC, AP, MRP, MP, and MEW are all defined using mathematical formulae.

Uploaded by

sunskruti2007
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Worksheet 2: Formulae

Provide the correct formula for each of the following economic terms.

Economic term Formulae

PED =

MED =

CED =

TOT =

Labour productivity =

Gini coefficient =

Unemployment rate =

MRT =

ART =

MPC =

MPT =

MPM =

APC =

APS =

Expenditure multiplier =

Real income =

© Cambridge University Press & Assessment 2023 vX 1


Economic term Formulae

GDP deflator =

Unit labour cost =

MC =

AP =

MRP =

MP =

MEW =

© Cambridge University Press & Assessment 2024 v1.2 2


Worksheet 2: Formulae answers

Economic term Formulae

percentage change in quantity demanded


PED =
percentage change in price

percentage change in quantity demanded


MED =
percentage change in income

percentage change in quantity demanded of good X


CED =
percentage change in quantity demanded of good Y

export price index


TOT = × 100
import price index

output produced
Labour productivity =
number of labour hours

a
, where a = area above Lorenz curve and
Gini coefficient = a + b
b = area below Lorenz curve

number of unemployed people


Unemployment rate = × 100
labour force

change in tax amount


MRT =
change in income

tax amount
ART = × 100
total income

change in consumption
MPC =
change in income

change in tax
MPT =
change in income

change in imports
MPM =
change in income

consumption
APC =
income

saving
APS =
income

1
Expenditure multiplier =
marginal popoensity to withdraw

© Cambridge University Press & Assessment 2023 vX 3


Economic term Formulae

Real income = Money income × DGP deflator

price index of base year


GDP deflator =
price index of current year

wage/hour
Unit labour cost =
output/hour

change in total cost


MC =
change in output

total output
AP =
labour employed

MRP = Sale Price × MR

change in total output


MP =
change in number of workers

MEW = Real per capita income + Leisure time – Negative externalities

© Cambridge University Press & Assessment 2024 v1.2 4

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