3rd-exam-notation

# 3rd-exam-notation - Q =short-run average variable cost AVC...

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3rd EXAM: NOTATION WE USE IN CLASS Consumer theory U=utility X=consumption of commodity X =change in MU=marginal utility; MU X ' U X =fixed utility along an indifference curve ¯ U p or P=price I=income =marginal rate of substitution=slope of indifference curve MRS ' * Y X * ' * MU X MU Y * = , i.e., slope of indifference curve equals slope of budget line MRS ' * Y X * ' * MU X MU Y * P X P Y is the Principle of Equal Marginal Utilities per Dollar MU X P X ' MU Y P Y Production theory q or Q=output K=capital L=labor Q=F( ,L)=f(L)=short-run production function with fixed capital and variable labor ¯ K Q=F(K,L)=long-run production function with variable capital and labor =fixed capital ¯ K =average product of labor=productivity AP L ' Q L =marginal product of labor MP L ' Q L =marginal product of capital MP K ' Q K C or TC=total cost FC=fixed cost VC=variable cost =short-run average fixed cost AFC ' FC

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Unformatted text preview: Q =short-run average variable cost AVC ' VC Q =short-run average total cost ATC ' TC Q ATC=AFC+AVC =fixed output along an isoquant ¯ Q w=wage rate i=user cost of capital =long-run average total cost LAC ' TC Q =long-run marginal cost LMC ' ∆ TC ∆ Q =marginal rate of technical substitution=slope of isoquant MRTS ' * ∆ K ∆ L * ' * MP L MP K * = , i.e., slope of isoquant equals slope of isocost line MRTS ' * ∆ K ∆ L * ' * MP L MP K * w i is the Principle of Equal Marginal Products per Dollar MP L w ' MP K i Π =profit R=revenue M Π =marginal profit= ∆Π ∆ Q MR=marginal revenue= ∆ R ∆ Q MC=marginal cost= ∆ C ∆ Q P=MC is the optimality condition for perfect competition P \$ AVC is the short-run no-shut-down condition...
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3rd-exam-notation - Q =short-run average variable cost AVC...

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