Summary Table of Microeconomic Formulas
1.Microeconomic
STT Content Formula Note
1 Demand Function QD = aP + b a = ΔQd/ΔP
2 Supply Function QS = cP + d c = ΔQs/ΔP
Total utility, or total
utility, is that the
aggregation of
satisfaction or
TU = U1 + MU2 +
3 Total Utility
MU3 + …
satisfaction that a
consumer receives
through the
consumption of an
honest or service.
+ MU > 0 => TU
increases gradually
+ MU < 0 => TU
4 Marginal Utility MU = ΔTU / ΔQ
gradually
+ MU = 0 => MU
maximal
Marginal rate of
substitution (MRS) is
that the amount of an
honest that a consumer
Marginal Rate of MRSXY = ΔY/ΔX = -
5 Substitution MUX/MUY
is willing to consume
in reference to another
good, as long because
the total utility good
stays the indetical
|Es| > 1: Supply is very
elastic: Supply curve
slopes little
%∆Qs ∆Qs/Qs |Es| < 1: Supply is
Price Elasticity of
ES = = smaller amount elastic:
%∆P ∆P/P
6 Supply (Q2−Q1)/Q1 The supply curve is more
=
(P2−P1)/P1 sloping
|Es| = 1: Unit elasticity of
supply: Supply curve
slopes 45º
, |Es| = 0: Perfectly
inelastic supply: The
supply curve is vertical
|Es| = ∞: Perfectly Elastic
Supply: The supply curve
is horizontal
|Ed| > 1: Demand is very
elastic:The demand curve
is a smaller amount
sloping
|Ed| < 1: Demand is
extremely elastic: The
%∆Qd
ED = = demand curve is a smaller
%∆P amount sloping
Cross Price ∆Qd/Qd
7 Elasticity of = |Ed| = 1: Unit elasticity of
∆P/P
Demand ( Q2−Q1)/Q1 demand : Demand curve
( P2−P1)/P1 slopes 45º
|Ed| = 0: Perfectly
inelastic demand: The
demand curve is vertical
|Ed| = ∞: Perfectly Elastic
Demand: The demand
curve is horizontal
EI < 0: X may be
asecondary good
EI > 0: X may be a
Income Elasticity normal good
8 of Demand
EI = %∆QD/ %∆I
+ 0 < EI < 1: X is an
important good
+ EI > 1: X may be a
luxury good
EXY < 0: X and Y are
complementary goods
Cross Price
EXY = %∆QD(X)/ EXY > 0: X and Y are
9 Elasticity of
Demand %∆PY substitute goods
EXY= 0: X and Y are
unrelated goods
+ Q : quantity of output
products
Factors of Q = f(L, K) + K: Physical capital
10 Production Q = f ( K, L, P, H ) + L: Labor
+ P : Land
+ H : Entrepreneurship
1.Microeconomic
STT Content Formula Note
1 Demand Function QD = aP + b a = ΔQd/ΔP
2 Supply Function QS = cP + d c = ΔQs/ΔP
Total utility, or total
utility, is that the
aggregation of
satisfaction or
TU = U1 + MU2 +
3 Total Utility
MU3 + …
satisfaction that a
consumer receives
through the
consumption of an
honest or service.
+ MU > 0 => TU
increases gradually
+ MU < 0 => TU
4 Marginal Utility MU = ΔTU / ΔQ
gradually
+ MU = 0 => MU
maximal
Marginal rate of
substitution (MRS) is
that the amount of an
honest that a consumer
Marginal Rate of MRSXY = ΔY/ΔX = -
5 Substitution MUX/MUY
is willing to consume
in reference to another
good, as long because
the total utility good
stays the indetical
|Es| > 1: Supply is very
elastic: Supply curve
slopes little
%∆Qs ∆Qs/Qs |Es| < 1: Supply is
Price Elasticity of
ES = = smaller amount elastic:
%∆P ∆P/P
6 Supply (Q2−Q1)/Q1 The supply curve is more
=
(P2−P1)/P1 sloping
|Es| = 1: Unit elasticity of
supply: Supply curve
slopes 45º
, |Es| = 0: Perfectly
inelastic supply: The
supply curve is vertical
|Es| = ∞: Perfectly Elastic
Supply: The supply curve
is horizontal
|Ed| > 1: Demand is very
elastic:The demand curve
is a smaller amount
sloping
|Ed| < 1: Demand is
extremely elastic: The
%∆Qd
ED = = demand curve is a smaller
%∆P amount sloping
Cross Price ∆Qd/Qd
7 Elasticity of = |Ed| = 1: Unit elasticity of
∆P/P
Demand ( Q2−Q1)/Q1 demand : Demand curve
( P2−P1)/P1 slopes 45º
|Ed| = 0: Perfectly
inelastic demand: The
demand curve is vertical
|Ed| = ∞: Perfectly Elastic
Demand: The demand
curve is horizontal
EI < 0: X may be
asecondary good
EI > 0: X may be a
Income Elasticity normal good
8 of Demand
EI = %∆QD/ %∆I
+ 0 < EI < 1: X is an
important good
+ EI > 1: X may be a
luxury good
EXY < 0: X and Y are
complementary goods
Cross Price
EXY = %∆QD(X)/ EXY > 0: X and Y are
9 Elasticity of
Demand %∆PY substitute goods
EXY= 0: X and Y are
unrelated goods
+ Q : quantity of output
products
Factors of Q = f(L, K) + K: Physical capital
10 Production Q = f ( K, L, P, H ) + L: Labor
+ P : Land
+ H : Entrepreneurship
