Microeconomics 17th edition

Brief Contents
Contents
Preface
Common Abbreviations
Economic Issues and Concepts
	1.1 What Is Economics?
		Resources
		Scarcity and Choice
		Opportunity Cost
		Production Possibilities Boundary
	APPLYING ECONOMIC CONCEPTS 1-1
		Four Key Economic Problems
		Microeconomics and Macroeconomics
		Economics and Government Policy
	1.2 The Complexity of Modern Economies
		The Nature of Market Economies
		The Decision Makers and Their Choices
		Production and Trade
	1.3 Is There an Alternative to the Market Economy?
		Types of Economic Systems
		The Great Debate
		Economics in the Social Sciences
		Government in the Modern Mixed Economy
	APPLYING ECONOMIC CONCEPTS 1-2
Economic Theories, Data, and Graphs
	2.1 Positive and Normative Statements
		Disagreements Among Economists
	APPLYING ECONOMIC CONCEPTS 2-1
	2.2 Building and Testing Economic Theories
		What Are Theories?
		Testing Theories
	APPLYING ECONOMIC CONCEPTS 2-2
	2.3 Economic Data
		Index Numbers
		Graphing Economic Data
	2.4 Graphing Economic Theories
		Functions
		Graphing Functions
		A Final Word
Demand, Supply, and Price
	3.1 Demand
		Quantity Demanded
	EXTENSIONS IN THEORY 3-1
		Quantity Demanded and Price
		Demand Schedules and Demand Curves
	3.2 Supply
		Quantity Supplied
		Quantity Supplied and Price
		Supply Schedules and Supply Curves
	APPLYING ECONOMIC CONCEPTS 3-1
	3.3 The Determination of Price
		The Concept of a Market
		Market Equilibrium
		Changes in Market Equilibrium
		A Numerical Example
		Relative Prices
		A Crucial Caveat
	APPLYING ECONOMIC CONCEPTS 3-2
Elasticity
	4.1 Price Elasticity of Demand
		The Measurement of Price Elasticity
		What Determines Elasticity of Demand?
		Elasticity and Total Expenditure
	4.2 Price Elasticity of Supply
		Determinants of Supply Elasticity
	4.3 Elasticity Matters for Taxation
	4.4 Other Demand Elasticities
		Income Elasticity of Demand
	APPLYING ECONOMIC CONCEPTS 4-1
		Cross Elasticity of Demand
	LESSONS FROM HISTORY 4-1
Price Controls and Market Efficiency
	5.1 Government-Controlled Prices
		Disequilibrium Prices
		Price Floors
		Price Ceilings
	APPLYING ECONOMIC CONCEPTS 5-1
	5.2 Rent Controls: A Case Study of Price Ceilings
		The Predicted Effects of Rent Controls
		Who Gains and Who Loses?
		Policy Alternatives
	5.3 An Introduction to Market Efficiency
		Demand as “Value” and Supply as “Cost”
		Economic Surplus and Market Efficiency
		Market Efficiency and Price Controls
		One Final Application: Output Quotas
		A Cautionary Word
	APPLYING ECONOMIC CONCEPTS 5-2
Consumer Behaviour
	6.1 Marginal Utility and Consumer Choice
		Diminishing Marginal Utility
		Utility Schedules and Graphs
		Maximizing Utility
		The Consumer’s Demand Curve
		Market Demand Curves
	APPLYING ECONOMIC CONCEPTS 6-1
	6.2 Income and Substitution Effects of Price Changes
		The Substitution Effect
		The Income Effect
		The Slope of the Demand Curve
	6.3 Consumer Surplus
		The Concept
		The Paradox of Value
	6A.1 Indifference Curves
		Diminishing Marginal Rate
		of Substitution
		The Indifference Map
	6A.2 The Budget Line
		Properties of the Budget Line
		The Slope of the Budget Line
	6A.3  The Consumer’s Utility-Maximizing Choices
		The Consumer’s Response to a Change
		in Income
		The Consumer’s Response to a Change
		in Price
	6A.4  Deriving the Consumer’s Demand Curve
		Income and Substitution Effects
Producers in the Short Run
	7.1 What Are Firms?
		Organization of Firms
		Financing of Firms
		Goals of Firms
	7.2 Production, Costs, and Profits
		Production
	APPLYING ECONOMIC CONCEPTS  7-1
		Costs and Profits
		Profit-Maximizing Output
		Time Horizons for Decision Making
	7.3 Production in the Short Run
		Total, Average, and Marginal Products
		Diminishing Marginal Product
		The Average–Marginal Relationship
	APPLYING ECONOMIC CONCEPTS  7-2
	7.4 Firms’ Costs in the Short Run
		Defining Short-Run Costs
		Short-Run Cost Curves
		Capacity
		Shifts in Short-Run Cost Curves
	APPLYING ECONOMIC CONCEPTS  7-3
Producers in the Long Run
	8.1 The Long Run: No Fixed Factors
		Profit Maximization and Cost Minimization
		Long-Run Cost Curves
	8.2 The Very Long Run: Changes in Technology
	LESSONS FROM HISTORY 8-1
		What Is Technological Change?
	APPLYING ECONOMIC CONCEPTS 8-1
		Firms’ Choices in the Very Long Run
	8A.1 Isoquants
		An Isoquant Map
	8A.2 Cost Minimization
		The Principle of Substitution
Competitive Markets
	9.1 Market Structure and Firm Behaviour
		Competitive Markets
		Competitive Behaviour
	9.2 The Theory of Perfect Competition
		The Assumptions of Perfect Competition
		The Demand Curve for a Perfectly Competitive Firm
		Total, Average, and Marginal Revenue
	APPLYING ECONOMIC CONCEPTS 9-1
	9.3 Short-Run Decisions
		Should the Firm Produce at All?
		How Much Should the Firm Produce?
		Short-Run Supply Curves
		Short-Run Equilibrium in a Competitive Market
	9.4 Long-Run Decisions
		Entry and Exit
	APPLYING ECONOMIC CONCEPTS 9-2
		Long-Run Equilibrium
		Changes in Technology
		Declining Industries
	LESSONS FROM HISTORY 9-1
Monopoly, Cartels, and Price Discrimination
	10.1 A Single-Price Monopolist
		Revenue Concepts for a Monopolist
		Short-Run Profit Maximization
		Why Are Monopolies Rare?
		Entry Barriers
		The Very Long Run and Creative Destruction
	APPLYING ECONOMIC CONCEPTS 10-1
	10.2 Cartels and Monopoly Power
	LESSONS FROM HISTORY 10-1
		The Effects of Cartelization
		Problems That Cartels Face
	10.3 Price Discrimination
		When Is Price Discrimination Possible?
		Different Forms of Price Discrimination
		The Consequences of Price Discrimination
Imperfect Competition and Strategic Behaviour
	11.1 Imperfect Competition
		Between the Two Extremes
		Defining Imperfect Competition
	11.2 Monopolistic Competition
		The Assumptions of Monopolistic Competition
		Predictions of the Theory
	11.3 Oligopoly and Game Theory
		Profit Maximization Is Complicated
		The Basic Dilemma of Oligopoly
		Some Simple Game Theory
	EXTENSIONS IN THEORY 11-1
		Extensions in Game Theory
	11.4 Oligopoly in Practice
		Cooperative Behaviour
		Competitive Behaviour
		The Importance of Entry Barriers
		Oligopoly and the Economy
Economic Efficiency and Public Policy
	12.1 Productive and Allocative Efficiency
		Productive Efficiency
		Allocative Efficiency
		Which Market Structures Are Efficient?
		Allocative Efficiency and Total Surplus
		Allocative Efficiency and Market
		Failure
	12.2 Economic Regulation to Promote Efficiency
		Regulation of Natural Monopolies
		Regulation of Oligopolies
	12.3 Canadian Competition Policy
		The
	LESSONS FROM HISTORY 12-1
		Recent Reforms
	APPLYING ECONOMIC CONCEPTS 12-1
		Future Challenges
How Factor Markets Work
	13.1 The Demand for Factors
		Marginal Revenue Product
		The Firm’s Demand Curve for a Factor
		The Market Demand Curve for a Factor
	13.2 The Supply of Factors
		The Supply of Factors to the Economy
		The Supply of Factors to a Particular Industry
		The Supply of Factors to a Particular Firm
	13.3 Factor Markets in Action
		Differentials in Factor Prices
		Economic Rent
	LESSONS FROM HISTORY 13-1
		A Final Word
Labour Markets and Income Inequality
	14.1 Wage Differentials
		Wage Differentials in Competitive Labour Markets
		Discrimination, Wages, and Employment
		Wage Differentials in Non-competitive
		Labour Markets
		Legislated Minimum Wages
	14.2 Labour Unions
		Collective Bargaining
	14.3 Income Inequality
		Measuring Income Inequality
		Causes of Rising Income Inequality
	APPLYING ECONOMIC CONCEPTS  14-1
		Policy Implications
Interest Rates and the Capital Market
	15.1 A Brief Overview of the Capital Market
	15.2 Present Value
		The Present Value of a Single Future Sum
		The Present Value of a Stream of Future Sums
		Summary
	15.3 The Demand for Capital
		The Firm’s Demand for Capital
		The Economy’s Demand for Investment
	15.4 The Supply of Capital
		Households’ Supply of Saving
		The Economy’s Supply of Saving
	15.5 Equilibrium in the Capital Market
		The Equilibrium Interest Rate
		Changes in the Market Equilibrium
	APPLYING ECONOMIC CONCEPTS 15-1
		Long-Run Trends in the Capital Market
Market Failures and Government Intervention
	16.1 Basic Functions of Government
	16.2 The Case for Free Markets
		Automatic Coordination
		Innovation and Growth
		Decentralization of Economic Power
	16.3 Market Failures
		Market Power
		Externalities
		Non-Rivalrous and Non-Excludable Goods
	APPLYING ECONOMIC CONCEPTS 16-1
		Asymmetric Information
		Summary
	APPLYING ECONOMIC CONCEPTS 16-2
	16.4 Broader Social Goals
		Income Distribution
		Preferences for Public Provision
	EXTENSIONS IN THEORY 16-1
		Protecting Individuals from Others
		Paternalism
		Social Responsibility
		A General Principle
	16.5 Government Intervention
		The Tools of Government Intervention
		The Costs of Government Intervention
		Government Failure
		How Much Should Government Intervene?
The Economics of Environmental Protection
	17.1 The Economic Rationale for Reducing Pollution
		Pollution as an Externality
		The Optimal Amount of Pollution Abatement
	17.2 Pollution-Reduction Policies
		Direct Regulatory Controls
		Emissions Taxes
		Tradable Pollution Permits: “Cap and Trade”
		Pricing Pollution
	17.3 The Challenge of Global Climate Change
		Greenhouse-Gas (GHG) Emissions
		The Case for Global Collective Action
		Energy Use, GDP, and Greenhouse-Gas Emissions
		Significant Policy Challenges
		Summary
Taxation and Public Expenditure
	18.1 Taxation in Canada
		Progressive Taxes
		The Canadian Tax System
	EXTENSIONS IN THEORY 18-1
	18.2 Evaluating the Tax System
		Taxation and Equity
		Taxation and Efficiency
	18.3 Public Expenditure in Canada
		Government Purchases and Transfers
		Canadian “Fiscal Federalism”
		Canadian Social Programs
	APPLYING ECONOMIC CONCEPTS 18-1
	18.4 Evaluating the Role of Government
		Public Versus Private Sector
		Scope of Government Activity
		Evolution of Policy
The Gains from International Trade
	19.1 The Gains from Trade
		Interpersonal, Interregional, and International Trade
		Illustrating the Gains from Trade
	EXTENSIONS IN THEORY 19-1
		The Gains from Trade with Variable Costs
	APPLYING ECONOMIC CONCEPTS 19-1
		Sources of Comparative Advantage
	19.2 The Determination of Trade Patterns
		The Law of One Price
		The Pattern of Foreign Trade
		Is Comparative Advantage Obsolete?
	APPLYING ECONOMIC CONCEPTS 19-2
		The Terms of Trade
Trade Policy
	20.1 Free Trade or Protection?
		The Case for Free Trade
		The Case for Protection
		Invalid Arguments for Protection
	LESSONS FROM HISTORY 20-1
	20.2 Methods of Protection
		Tariffs
		Import Quotas
		Tariffs Versus Quotas: An Application
		Trade-Remedy Laws and Non-Tariff Barriers
		Climate Policy Confronts Trade Policy
	20.3 Current Trade Policy
		The GATT and the WTO
		Regional Trade Agreements
		Trade Creation and Trade Diversion
		The North American Free Trade Agreement
	APPLYING ECONOMIC CONCEPTS 20-1
Mathematical Notes
Timeline of Great Economists
Economists on Record . . .
	On the economic problem . . .
	On “balance” in economics . . .
	On choosing between theories . . .
Credits
Index