Economics Tools
Calculators, diagrams, and models for Cambridge Economics β PED, GDP, exchange rates, and more.
π Price Elasticity of Demand (PED)
PED = % Change in Quantity Demanded Γ· % Change in Price. Values > 1 = elastic; < 1 = inelastic.
π Price Elasticity of Supply (PES)
π° Income Elasticity of Demand (YED)
π Cross Elasticity of Demand (XED)
βοΈ Consumer Surplus Calculator
π GDP Growth Rate
π‘οΈ CPI Inflation Rate
π¦ Real Interest Rate (Fisher Equation)
π Fiscal Multiplier
π₯ Unemployment Rate
π HDI Calculator
π Break-Even Calculator
πΉ Profit / Loss Calculator
π·οΈ Average & Marginal Cost
π Revenue Calculator
π± Exchange Rate Converter
π’ Trade Balance
π Comparative Advantage Checker
Enter the opportunity costs of producing 1 unit of each good in each country.
πΉ Terms of Trade Index
π Interactive Economic Diagram Builder
π Key Formulae Reference
| Formula | Expression | Notes |
|---|---|---|
| PED | % ΞQd Γ· % ΞP | Always negative; |PED|>1 = elastic |
| PES | % ΞQs Γ· % ΞP | Always positive (upward slope) |
| YED | % ΞQd Γ· % ΞIncome | >1 luxury; <0 inferior |
| XED | % ΞQd(A) Γ· % ΞP(B) | >0 substitutes; <0 complements |
| Total Revenue | P Γ Q | If elastic, price β β TR β |
| Profit | TR β TC | TC = FC + VC |
| Break-Even | FC Γ· (P β VC) | Units needed to cover all fixed costs |
| Average Cost | TC Γ· Q | Falls with economies of scale |
| Marginal Cost | ΞTC Γ· ΞQ | Profit max: MC = MR |
| GDP (Expenditure) | C + I + G + (X β M) | Aggregate demand components |
| GDP Growth | (GDPβ β GDPβ) Γ· GDPβ Γ 100 | Use real GDP to exclude inflation |
| CPI Inflation | (CPIβ β CPIβ) Γ· CPIβ Γ 100 | UK target: 2% (Bank of England) |
| Real Interest Rate | Nominal Rate β Inflation Rate | Fisher equation (approximate) |
| Multiplier | 1 Γ· (1 β MPC) | or: 1 Γ· MPS |
| Unemployment Rate | (Unemployed Γ· Labour Force) Γ 100 | Excludes economically inactive |
| Trade Balance | Exports β Imports | Positive = surplus; negative = deficit |
| Terms of Trade | (Export Price Index Γ· Import Price Index) Γ 100 | >100 = improved terms |
| Consumer Surplus | Β½ Γ (WTP β P) Γ Q | Triangle below demand, above price |
| Gini Coefficient | A Γ· (A + B) | 0 = equality; 1 = total inequality |
π Key Economic Concepts at a Glance
βοΈ Opportunity Cost
The value of the next best alternative foregone when a choice is made. Every decision has one.
π Scarcity
Resources are finite; wants are infinite. Forces all economic agents to make choices and trade-offs.
π Law of Demand
Price rises β Qd falls. Cause: substitution effect + income effect. Curve slopes downward.
π Law of Supply
Price rises β Qs rises. Higher prices make production more profitable, attracting supply.
π― Price Mechanism
Prices signal, incentivise, and ration. Self-correcting via surplus (price β) and shortage (price β).
π Market Failure
Free markets misallocate resources. Types: externalities, public goods, info failure, monopoly power.
π Business Cycle
Expansion β Peak β Contraction β Trough β Recovery. GDP fluctuates around long-run trend.
π¦ Monetary Policy
Central bank sets interest rates. Higher rates β less borrowing β lower AD β lower inflation.
ποΈ Fiscal Policy
Government taxes and spending. Expansionary: βG or βT. Contractionary: βG or βT.
π Comparative Advantage
Specialise where opportunity cost is lowest. Basis for mutually beneficial international trade.
π± Exchange Rate
Price of one currency in another. Appreciation: exports pricier, imports cheaper. J-curve effect applies.
π Development
HDI measures health + education + income. GDP per capita alone misses inequality and wellbeing.