Data Booklet

1 Consumer surplus: ((𝑃 𝑎𝑡 𝑦 𝑖𝑛𝑡𝑒𝑟𝑐𝑒𝑝𝑡 𝑜𝑓 𝑑𝑒𝑚𝑎𝑛𝑑 − 𝑃𝑒) × 𝑄𝑒) ÷ 2

Producer surplus: ((𝑃 𝑎𝑡 𝑦 𝑖𝑛𝑡𝑒𝑟𝑐𝑒𝑝𝑡 𝑜𝑓 𝑠𝑢𝑝𝑝𝑙𝑦 − 𝑃𝑒) × 𝑄𝑒) ÷ 2
y intercept of demand or supply is where the demand or supply function meets the vertical
or price axis
1 𝑃𝐸𝐷 = %△𝑄𝑑 ÷ %△𝑃 = (((𝑄2 − 𝑄1) ÷ 𝑄1) ÷ ((𝑃2 − 𝑃1) ÷ 𝑃1)) × 100
2 𝑌𝐸𝐷 = %△𝑄𝑑 ÷ %△𝑌 = (((𝑄2 − 𝑄1) ÷ 𝑄1) ÷ ((𝑌2 − 𝑌1) ÷ 𝑌1)) × 100
YED >1 = Normal goods ; rightward shift of demand curve
YED <1 = Necessities or inferior goods; leftward shift of demand curve
3 𝑃𝐸𝑆 = %△𝑄𝑠 ÷ %△𝑃 = (((𝑄2 − 𝑄1) ÷ 𝑄1) ÷ ((𝑃2 − 𝑃1) ÷ 𝑃1)) × 100
4 Tax: Qs = c – d(P-t)

Consumers Surplus:
𝑚𝑎𝑥𝑖𝑚𝑢𝑚 𝑝𝑟𝑖𝑐𝑒− 𝑃𝑒
Revenue before tax = 2
x Qe
𝑚𝑎𝑥𝑖𝑚𝑢𝑚 𝑝𝑟𝑖𝑐𝑒−𝑃𝑐 𝑥 𝑃𝑡
Revenue after tax = 2
Consumption expenditure = P X Q

Producers Surplus:
𝑃𝑐−2
Revenue before tax = 2
x Qe
𝑃𝑝 −2 𝑥 𝑄𝑡
Revenue after tax = 2
Producers Revenue = P X Q
(𝑃𝑐 –𝑃𝑝) 𝑥 (𝑄𝑒−𝑄𝑡)
Welfare Loss = 2
5 Subsidies: c – d(P+ Sb)

Consumers Surplus:
𝑚𝑎𝑥𝑖𝑚𝑢𝑚 𝑝𝑟𝑖𝑐𝑒− 𝑃𝑒
Revenue before Subsidy = 2
x Qe
𝑚𝑎𝑥𝑖𝑚𝑢𝑚 𝑝𝑟𝑖𝑐𝑒−𝑃𝑐 𝑥 𝑄𝑠𝑢𝑏
Revenue after Subsidy = 2
Consumption expenditure = P X Q

Producers Surplus:
𝑃𝑒−𝑚𝑖𝑛𝑖𝑚𝑢𝑚 𝑝𝑟𝑖𝑐𝑒 2
Revenue before Subsidy = 2
x Qe
𝑃𝑝 −𝑚𝑖𝑛𝑖𝑚𝑢𝑚 𝑝𝑟𝑖𝑐𝑒 𝑥 𝑄𝑠𝑢𝑏
Revenue after Subsidy = 2
Producers Revenue = P X Q
(𝑃𝑝 –𝑃𝑐) 𝑥 (𝑄𝑠𝑢𝑏−𝑄𝑒)
Total Social Benefit = 2
6 Price Ceiling
Excess demand = Shortage = Qd –Qs
Change in consumption expenditure = ΔCE = Pe x Qe – Pc x Qs
Change in Producers Revenue = ΔPR = ΔCE
 Data Booklet

7 Price Floor
Excess Supply = Surplus = Qs - Qd
Change in consumption expenditure = ΔCE = Pe x Qe
before price floor = P1 x Qs after price floor
Change in Producer Revenue = ΔPR = ΔCE
Government expenditure Pf x (Qs – Qd)
Government expenditure = Total producers revenue – total consumption
expenditure
Excess supply of Labour = Qd < Qe

8 𝐴𝑃 =
𝑇𝑃
𝑀𝑃 =
Δ𝑇𝑃
𝑄 Δ𝑄
9 TR = P x Q 𝐴𝑅 =
𝑇𝑅
𝑀𝑅 =
Δ𝑇𝑅
𝑄 Δ𝑄
10 Profit = TR – TC ; TR > TC = Supernormal profit; TR<TC =
Loss; TR = TC = Break – even point
11 GDP = C+I+G+X-M GDP per-capita = 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛
𝐺𝐷𝑃

NDP = GDP – depreciation

Green GDP = GDP – the value of environment degradation
GNI or GNP = GDP + Income earned from abroad – income sent abroad
GNI = GDP + Net Income from abroad
𝑛𝑜𝑚𝑖𝑛𝑎𝑙 𝐺𝐷𝑃
GDP deflator = 𝑟𝑒𝑎𝑙 𝐺𝐷𝑃
x 100
𝑛𝑜𝑚𝑖𝑛𝑎𝑙 𝐺𝐷𝑃
Real GDP = 𝑃𝑟𝑖𝑐𝑒 𝑑𝑒𝑓𝑙𝑎𝑡𝑜𝑟
x 100
12 Income method, expenditure method, output method
Injections (J) = C + I + G + X ;
Withdrawals (W) or Leakages (L) = C + S + T + M
13 𝐾=
1
=
1
=
1
1−𝑀𝑃𝐶 𝑀𝑃𝑆 𝑀𝑃𝑆+𝑀𝑃𝑇+𝑀𝑃𝑀

Δ 𝑖𝑛 𝑟𝑒𝑎𝑙 𝐺𝐷𝑃
K = 𝑖𝑛𝑖𝑡𝑖𝑎𝑙 Δ 𝑖𝑛 𝑒𝑥𝑝𝑒𝑛𝑑𝑖𝑡𝑢𝑟𝑒
14 𝑛𝑢𝑚𝑏𝑒𝑟 𝑢𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑
Unemployment Rate = 𝑈𝑅 = 𝑇𝑜𝑡𝑎𝑙 𝐿𝑎𝑏𝑜𝑢𝑟 𝐹𝑜𝑟𝑐𝑒 x 100
15 Real national Income 𝑁𝑌 =
𝑛𝑜𝑚𝑖𝑛𝑎𝑙 𝑖𝑛𝑐𝑜𝑚𝑒
x 100
𝐶𝑃𝐼
𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑏𝑎𝑠𝑘𝑒𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑖𝑛 𝑠𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝑦𝑒𝑎𝑟
Rate of inflation = 𝑅 𝑜𝑓 𝐼𝑛𝑓𝑙 = 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑠𝑎𝑚𝑒 𝑏𝑎𝑠𝑘𝑒𝑡 𝑖𝑛 𝑏𝑎𝑠𝑒 𝑦𝑒𝑎𝑟
x 100
𝑌2−𝑌1
𝐶𝑃𝐼 =
𝑌1
x 100
16 Weighted price index=
𝑝𝑟𝑖𝑐𝑒 𝑖𝑛𝑑𝑒𝑥 𝑜𝑓 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑦𝑒𝑎𝑟
x 100 = rate of inflation
𝑏𝑎𝑠𝑒 𝑦𝑒𝑎𝑟 𝑖𝑛𝑑𝑒𝑥
𝑓𝑖𝑛𝑎𝑙 𝑣𝑎𝑙𝑢𝑒 −𝑖𝑛𝑖𝑡𝑖𝑎𝑙 𝑣𝑎𝑙𝑢𝑒
% change in real GDP = 𝑖𝑛𝑖𝑡𝑖𝑎𝑙 𝑣𝑎𝑙𝑢𝑒
x 100
% Δ 𝑖𝑛 𝑟𝑒𝑎𝑙 𝐺𝐷𝑃
% change in real GDP per capita = %Δ𝑖𝑛 𝑃𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 x 100
17 Average rate of tax = 𝑌𝐺
𝑡𝑎𝑥
=
𝑙𝑒𝑣𝑒𝑙 𝑜𝑓 𝑖𝑛𝑐𝑜𝑚𝑒
𝑖𝑛𝑑𝑖𝑣𝑖𝑑𝑢𝑎𝑙𝑠 𝑔𝑟𝑜𝑠𝑠 𝑖𝑛𝑐𝑜𝑚𝑒

Δ𝑡𝑎𝑥 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑡𝑎𝑥

Marginal rate of tax = Δ𝑌𝐺 = 𝑐ℎ𝑎𝑛𝑔𝑒 𝑖𝑛 𝑔𝑟𝑜𝑠𝑠 𝑖𝑛𝑐𝑜𝑚𝑒
 Data Booklet

18 𝑂𝑢𝑡𝑝𝑢𝑡 𝑌
Opportunity Cost = 𝑂𝑢𝑡𝑝𝑢𝑡 𝑋 =
𝑂𝑢𝑡𝑝𝑢𝑡 𝑋
𝑂𝑢𝑡𝑝𝑢𝑡 𝑌

19 Tariffs
Domestic supply = P world x 0 – Q1
Greater revenue = Pw + tariff x 0 – Q3
Increase in production = a+b+C+g+h
Foreign production before tariff (imports M) = Q1 – Q2: Revenue = h +I + j + k
Domestic production after tariff QD falls – M imports fall Q3 –Q4
Import revenue M = d + e
Consumers pay higher prices Pw + tariff: demand falls = 0 – Q2 to 0 – Q 4
20 Quotas Domestic producers after Quota earn = a+f
Foreign producers revenue = b + g + h
Foreign producers before quota = b + c + d + e
Consumers pay lower price Pw and buy 0 – Q2
Government dead weight loss = j + k
Loss of consumers surplus = k
21 Subsidy Domestic producers earn = a
Foreign producers earn = b + c + d
Subsidy increases supply 0 – Q3
Foreign supply decreases Q3 – Q2
After subsidy
Domestic revenue = a + b + e + f + g
Foreign revenue = c + d
Government expenditure = e + f +g
Domestic production = Q1 – Q3
Inefficiency = g = resources misallocated
22 𝑓𝑜𝑟𝑒𝑥 𝑝𝑟𝑖𝑐𝑒 𝑜𝑓 𝑔𝑜𝑜𝑑
Exchange Rate of foreign currency = 𝑑𝑜𝑚𝑒𝑠𝑡𝑖𝑐 𝑝𝑟𝑖𝑐𝑒 𝑜𝑓 𝑔𝑜𝑜𝑑
23 Current account + Capital account + financial account + change in forex assets = 0
Current account – (capital account + financial account + Δ in reserves)