Economics of Social Issues

Title
Contents
1 Alleviating Human Misery: The Role of Economic Reasoning
	World Poverty and Economics
		Our Insatiable Wants
		Our Limited Means
		The Capacity of the Economy to Produce
		Assessing Well-Being Using GDP
	Causes of Poverty and Requisites of Economic Growth
	Can Governments Help?
		Governments of LDCs
		Governments of DCs
	Summary
2 Economic Systems, Resource Allocation, and Social Well-Being: Lessons from China’s Transition
	Economic Systems
		Pure Market Economy
		Pure Command Economy
		Mixed Systems
	Resource Allocation in a Market Economy
		Market Structure
		Market Forces
		Competitive Market Equilibrium and Social Well-Being
	Resource Allocation in a Command Economy
		Centralized Planning
		Problems with Centralized Planning
	The New Chinese Economy
		China’s Transition to a Market-Oriented Economy
		China’s Transition to Markets: What Are the Facts?
		Problems of Transition in China
	Summary
3 Government Control of Prices in Mixed Systems: What Are the Actual Outcomes?
	Price Ceilings and Floors
	Rent Controls
		Demand
		Supply
		Price
		The Effects of Rent Controls
	Minimum Wages
		Market Demand for Labor
		The Demand for Labor by One Employer
		Market Supply of Labor
		The Labor Market
		The Effects of the Minimum Wage
	Summary
4 Pollution Problems: Must We Foul Our Own Nests?
	What Is Pollution?
		The Environment and Its Services
		Recycling of Wastes and the Concept of Pollution
		Common Forms of Pollution
	Markets, Resource Allocation, and Social Well-Being: A Recap and Extension
		Demand, Marginal Private Benefit, and Marginal Social Benefit
		Supply, Marginal Private Cost, and Marginal Social Cost
		The Market and Social Well-Being
	Economics of Pollution
		Why Polluters Pollute
		Pollution and Resource Allocation
		The Appropriate Level of Pollution Control
	What Can Be Done about Pollution?
		Direct Controls
		Indirect Controls
		Creation of Pollution Rights Markets
	Summary
5 Economics of Crime and Its Prevention: How Much Is Too Much?
	What Is Crime?
		Immorality?
		Illegality?
		Classification of Criminal Acts
	The Costs of Crime
	Different Types of Goods and Services
		Private Goods and Services
		Semiprivate Goods and Services
		Public Goods and Services
		The Free-Rider Problem
		Government Production of Public Items
	The Economics of Crime Prevention Activities
		The “Optimal” Level
		Allocation of the Crime Prevention Budget
		Changing the Legal Status of Goods and Services
		Causes of Criminal Activity
	Summary
6 The Economics of Education: Crisis and Reform
	The Crisis in K–12
	K–12 as a Purely Private Market
	Potential Shortcomings of a Purely Private Market for K–12
		Positive Externalities in Consumption
		Lost Social and Cultural Cohesion through Segregation
		What of Equal Opportunity?
	Proposals for Reform in the Current K–12 System
		School Choice and Vouchers
		Class-Size Reductions and Other School Resource Issues
		Reform Proposals: A Postscript
	Summary
7 Poverty and Discrimination: Why Are So Many Still Poor?
	Poverty in Terms of Absolute Income Levels
		What Is Poverty?
		Who Are the Poor?
	Poverty in Terms of Income Distribution
		Income Inequality
	The Economic Causes of Poverty
		Determinants of Resource Prices and Employment
		Determination of Individual or Family Income
		Determinants of Income Distribution
		The Effects of Discrimination on Income
	Evidence of Discrimination in Our Economy
		Wage Discrimination
		Employment Discrimination
		Occupational Discrimination
	Government Attempts to Alleviate Poverty
		The Old Federal Welfare System
		Problems with the Old Welfare System
		Welfare Reform and the New System
	Using Tax Policy to Fight Poverty
		The Earned Income Tax Credit
		The Negative Income Tax Proposal
	What Can Be Done about Discrimination?
		Reduce Tastes for Discrimination
		Reduce Market Imperfections
		Reduce Discrimination in Development of Human Capital
		Reduce Occupational Segregation
	Summary
8 The Economics of Monopoly Power: Who Does What to Whom?
	The Economics of Monopoly Power
		What Is Monopoly Power?
		Outputs and Prices
		Entry Restrictions
		Nonprice Competition
	Should We Fear Monopoly Power?
		Outputs and Prices
		Entry Restrictions and Resource Allocation
		Nonprice Competition
		What of Bigness?
	The Peculiar Case of Natural Monopoly
		When Should Government Regulate Business?
		Regulation and Corporate Responsibility
	Summary
9 The Economics of Professional Sports: What Is the Real Score?
	The Professional Sports Business
		Organizational Structure
		Teams and Players
		Economic Analysis and Professional Sports
	The Product Market
		Cooperation among Teams
		Cartels
		Coordinated Behavior
		Pricing and Output for Broadcast Rights
		The Number and Location of Teams
		The Stadium Controversy
	The Resource Market
		The Employment of Players
		Monopsony
		Wages and Employment in a Monopsony
		Free Agency
		Labor Disputes
		Do Professional Athletes Earn Their Pay?
		Illicit Drugs and Professional Sports
		The Case of Major League Soccer
	Summary
10 Competition in the Global Marketplace: Should We Protect Ourselves from International Trade?
	The Controversy over International Trade
		The Protectionist Viewpoint
		The Free Trade Viewpoint
	The Economics of the Global Marketplace
		How Trade Takes Place
		Production and Consumption Possibilities
		The Principle of Comparative Advantage
		How International Trade Is Financed
		International Trade Restrictions
	Analysis of the Controversy
		Protection from Cheap Foreign Goods
		Outsourcing of Service Jobs
		Payments Problems
		Protection of Key and Infant Industries
		Protection of the Environment and Human Rights
	Today’s Global Trade Environment
		The World Trade Organization
		Common Markets
	Summary
11 Economic Growth: Why Is the Economic Road So Bumpy?
	The Concept of Economic Growth
		What Is Economic Growth?
		The Rate of Growth
	Short-Run Fluctuations in Economic Growth
		What Are Business Cycles?
		Theories of the Business Cycle
	The Determinants of Economic Growth
		Availability of Economic Resources
		Productivity Factors
	The Recent Slowdown in Growth
		Contributing Factors
		The 2001 Recession
		The 2007 Peak and Beyond
		Where Do We Go from Here?
	Summary
12 Money, Banking, and the Financial System: Old Problems with New Twists
	What Are Banks?
		Commercial Banks
		Investment Banks and Insurance Companies
	What Is Money?
		Functions of Money
		The Money Supply (M1 and M2) in the United States
	The Process of Creating Money
		Commercial Banks and Other Depository Institutions
		Banking Regulation
		Balance Sheet of a Bank
		The Fractional Reserve Banking System
		Demand Deposit Creation
	The Issue of Control
		The Federal Reserve System
		Federal Reserve Controls
		Federal Reserve Targets
	The Money Supply, Interest Rates, and the Price Level
		Interest Rates
		Quantity Theory of Money
	The Financial Crisis of 2008
		The Home Real Estate Market
		Financial Instruments and Accounting Rules
		Fall 2008
		The Future
	Summary
13 Unemployment and Inflation: Can We Find a Balance?
	What Is Unemployment?
		The Labor Force
		Unemployment in a Market Economy
	Analysis of the Unemployment Problem
		Types of Unemployment
		Further Dimensions of the Unemployment Problem
	What Is Inflation?
		How Is Inflation Measured?
		Rate of Inflation
	Economic Effects of Inflation
		Equity Effects
		Efficiency Effects
		Output Effects
	Economic Analysis of Unemployment and Inflation
		Circular Flow of Economic Activity
		Aggregate Demand
		Aggregate Supply
		Aggregate Demand and Supply
		Reasons for Deficient Aggregate Demand
		Reasons for Weak Aggregate Supply
	Possible Trade-offs and Policy Options
		The Phillips Curve
		Policy Problems
	Summary
14 Government Spending, Taxation, and the National Debt: Who Wins and Who Loses?
	What Are People Afraid Of?
		Size of Government
		Tax Inequities
	The Problem of Size
		Government Expenditures
		Government Receipts
	Economic Analysis of the Problem of Size
		An Efficient Level of Government Expenditures
		Public Goods
		External Benefits and Costs
		Income Distribution
		Summary
	Tax Principles and Analysis
		Tax Equity
		Tax Efficiency
		Principles of Shifting and Incidence
	The American Tax System
		Federal Tax System
		The Personal Income Tax
	The Beginning of a New Century
		Economic Effects of Government Borrowing
		Economic Effects of Federal Debt Retirement
		Recent Tax Reforms
		The Financial Crisis of 2008
	Summary
15 Social Security and Medicare: How Secure Is Our Safety Net for the Elderly?
	Social Insurance
	Social Security
		A Brief History of Social Security
		The Current Status of Social Security
	The Economic Effects of Social Security
		Income
		Labor Supply
		Saving and Investment
	The Future of Social Security
		The Financial Dilemma
		Possible Solutions
	The Market for Health Care: A Brief Overview
		The Nation’s Health Dollar: Where It Came From and Where It Went
		Health Expenditure Growth
		Government Role in Health Care Financing
		The Decline in Importance of Private Health Insurance
	The Medicare Program
		Coverage
		Financing
		Provider Payments
	The Economic Effects of Medicare
	The Future of Medicare
		The Financial Dilemma
		Possible Solutions
		The Medicare Modernization Act
	Summary
Glossary
Index