# 1.4 Application to Economics

version from 2016-09-08 01:38

## Section 1

What are the 3 Economic Functions?Cost Function C(q), Revenue Function R(q), Profit Function
what is "q" in the economic functions?it is the input
what is the cost function formula?C(q) = Fixed Cost + Variable Cost
Fixed cost is represented by the...?Vertical intercept (y-intercept)
Variable cost is the same as...?Marginal Cost, Slope, Rate of Change
How can we identify the Variable Cost in an equation?it will be the one right next to the variable, such as "x"
What is the Revenue Function, R(q) formula?Revenue = price x quantity
The cost function, C(q) is a () function?Increasing Function
what is the formula for the Profit Function?Profit = Revenue R(q) - Cost C(q)

## Section 2

What is the Break Even Point?it is when Profit is Zero
What is true at the break even point ?Revenue = Cost
How do we find the Break Even Point?Set the Cost Function C(q) equal to the Revenue Function R(q) and solve for q
what does "Marginal" anything mean?Rate of Change
so Marginal (revenue|profit|cost) all refer to...?how these change in response to ONE UNIT CHANGE IN QUANTITY

## Section 3

As prices increase....what happens?Manufacturers(suppliers) are willing to supply MORE of a product, BUT the Quantity Demanded by consumers FALLS
Why do we have two different curves? (supply | demand)because manufacturers(suppliers) and consumers react differently to changes in price
What variable is price?Price is the independent variable on the Vertical Axis
What variable is Quantity?quantity is the dependent variable on the Horizontal axis (x-axis)
Why is quantity the Dependent variable?because the amount of a product that people are going to buy (consumers) or sell (suppliers) DEPENDS on the price of that item