Microeconomics and behavior

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Contents
PART 1 Introduction
	Chapter 1 Thinking Like an Economist
		The Cost-Benefit Approach to Decisions
			Example 1.1: Comparing Costs and Benefits
		The Role of Economic Theory
		Common Pitfalls in Decision Making
			Example 1.2: Implicit Cost
			Example 1.3: Costs and Benefits Are Reciprocal
			Example 1.4: Opportunity Cost
			Example 1.5: Sunk Cost Part 1
			Example 1.6: Sunk Cost Part 2
			Example 1.7: Comparing Costs and Benefits Part 1
			Example 1.8: Comparing Costs and Benefits Part 2
			Example 1.9: Marginal Cost and Benefit vs. Average Cost and Benefit
			Example 1.10: Applying the Cost-Benefit Principle
		Using Marginal Benefit and Marginal Cost Graphically
			Example 1.11: Comparing Marginal Benefit and Cost Graphically
		The Invisible Hand
			Example 1.12: Applying Marginal Benefit and Cost Graphically
		Would Parents Want Their Daughter or Son to Marry Homo Economicus?
		The Economic Naturalist
		ECONOMIC NATURALIST 1.1: Why Is Airline Food So Bad?
		ECONOMIC NATURALIST 1.2: Why Do Many Manual Transmissions Have Six Forward Speeds, Many Automatics Only Four?
		Positive Questions and Normative Questions
		Microeconomics and Macroeconomics
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
	Chapter 2 Supply and Demand
		Chapter Preview
		Supply and Demand Curves
		Equilibrium Quantity and Price
		Adjustment to Equilibrium
		Some Welfare Properties of Equilibrium
		Free Markets and the Poor
			Example 2.1: Alternate Allocation Mechanisms
			Example 2.2: Excess Demand
		Price Supports
		Determinants of Supply and Demand
		Predicting and Explaining Changes in Price and Quantity
		ECONOMIC NATURALIST 2.1: Why Do the Prices of Some Goods, Such as Apples, Go Down during the Months of Heaviest Consumption While the Prices of Others, Such as Beachfront Cottages, Go Up?
			Example 2.3: Increasing Opportunity Cost
		The Algebra of Supply and Demand
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
		Appendix 2A: How Do Taxes Affect Equilibrium Prices And Quantities?
PART 2 The Theory of Consumer Behavior
	Chapter 3 Rational Consumer Choice
		Chapter Preview
		The Opportunity Set or Budget Constraint
		Budget Shifts Due to Price or Income Changes
			Example 3.1: Quantity Discounts
			Example 3.2: Budget Constraints
		Consumer Preferences
		The Best Feasible Bundle
			Example 3.3: Corner Solutions
			Example 3.4: Rational Choice Model in Action
		ECONOMIC NATURALIST 3.1: Why Do People Often Give Gifts in Kind Instead of Cash?
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
		Appendix 3A: The Utility Function Approach to the Consumer Budgeting Problem
	Chapter 4 Individual and Market Demand
		Chapter Preview
		The Effects of Changes in Price
		The Effects of Changes in Income
		The Income and Substitution Effects of a Price Change
			Example 4.1: Perfect Complements
			Example 4.2: Perfect Substitutes
		Consumer Responsiveness to Changes in Price
			Example 4.3: Individual Demand Curves for Perfect Complements
		Market Demand: Aggregating Individual Demand Curves
			Example 4.4: Market Demand
			Example 4.5: Market Demand with Identical Consumers
		Price Elasticity of Demand
		Elasticity and Total Expenditure
			Example 4.6: Market Demand for Transit
		The Dependence of Market Demand on Income
			Example 4.7: The Engel Curve
		ECONOMIC NATURALIST 4.1: Why Has the Nature of Outdoor Cooking Appliances Changed Dramatically in Recent Decades?
		Application: Forecasting Economic Trends
		Cross-Price Elasticities of Demand
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
		Appendix 4A: Additional Topics in Demand Theory
	Chapter 5 Applications of Rational Choice and Demand Theories
		Chapter Preview
		Using the Rational Choice Model to Answer Policy Questions
		Consumer Surplus
			Example 5.1: Consumer Surplus
		ECONOMIC NATURALIST 5.1: Why Do Some Tennis Clubs Have an Annual Membership Charge in Addition to Their Hourly Court Fees?
		ECONOMIC NATURALIST 5.2: Why Do Some Amusement Parks Charge Only a Fixed Admission Fee, with no Additional charge even for rides with long lines?
		Overall Welfare Comparisons
			Example 5.2: Budget Constraints
		Using Price Elasticity of Demand
		The Intertemporal Choice Method
			Example 5.3: Marginal Rate of Time Preference
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
	Chapter 6 The Economics of Information and Choice under Uncertainty
		Chapter Preview
		The Economics of Information
		The Costly-to-Fake Principle
		ECONOMIC NATURALIST 6.1: Why Is Coyness Often an Attractive Attribute?
		ECONOMIC NATURALIST 6.2: Why Do Residents of Small Towns Spend Less on Professional Clothes Than Their Counterparts in Big Cities?
		The Full-Disclosure Principle
		ECONOMIC NATURALIST 6.3: Why Do \"Almost New\" Used Cars Sell for So Much Less Than Brand New Ones?
		Choice under Uncertainty
			Example 6.1: Expected Utility
			Example 6.2: Expected Value of Wealth
			Example 6.3: Risk Neutral
			Example 6.4: Expected Utility
			Example 6.5: Expected Benefit
		Insuring against Bad Outcomes
		ECONOMIC NATURALIST 6.4: Why Was American Health Reform Legislation So Complicated?
		Statistical Discrimination
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
		Appendix 6A: Search Theory and the Winner\'s Curse
	Chapter 7 Departures from Standard Rational Choice Models (With and Without Regret)
		Chapter Preview
		An Application of the Present-Aim Standard: Altruistic Preferences
			Example 7.1: Altruistic Preferences
		The Strategic Role of Preferences
		Tastes Not Only Can Differ, They Must Differ
		ECONOMIC NATURALIST 7.1: Why Do People Vote in Presidential Elections?
			Example 7.2: A Symmetric Problem
		Bounded Rationality
		Affective Forecasting Errors
		Judgmental Heuristics and Biases
		ECONOMIC NATURALIST 7.2: Why Does the Rookie of the Year In Baseball Often Have a Mediocre Second Season?
		The Psychophysics of Perception
		ECONOMIC NATURALIST 7.3: Why Do Real Estate Agents Often Show Clients Two Houses That Are Nearly Identical, Even Though One Is Cheaper and in Better Condition than the Other?
		The Self-Control Pitfall
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
PART 3 The Theory of the Firm and Market Structure
	Chapter 8 Production
		Chapter Preview
		The Input-Output Relationship, or Production Function
		Production in the Short Run
		ECONOMIC NATURALIST 8.1: Why Can\'t All the World\'s People Be Fed from the Amount of Grain Grown in a Single Flowerpot?
		Total, Marginal, and Average Products
			Example 8.1: Interior Solution
			Example 8.2: Production Decision
			Example 8.3: Efficient Allocation
		Production in the Long Run
		Returns to Scale
		ECONOMIC NATURALIST 8.2: Why Do Builders Use Prefabricated Frames for Roofs but Not for Walls?
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
		Appendix 8A: Mathematical Extensions of Production Theory
	Chapter 9 Costs
		Chapter Preview
		Costs in the Short Run
		Graphing the Total, Variable, and Fixed Cost Curves
			Example 9.1: Graphing the Cost Functions
		Other Short-Run Costs
			Example 9.2: Determining Production Costs
			Example 9.3: Graphing Cost Curves
		Allocating Production between Two Processes
			Example 9.4: Minimum-Cost Production
		The Relationship Among MP, AP, MC, and AVC
		Costs in the Long Run
		ECONOMIC NATURALIST 9.1: Why Is Gravel Made by Hand in Nepal but by Machine in the United States?
		ECONOMIC NATURALIST 9.2: Why Do Unions Support Minimum Wage Laws So Strongly?
		ECONOMIC NATURALIST 9.3: Why Would a Bathroom Equipment Manufacturer Bake the Image of a Housefly onto the Center of Its Ceramic Urinals?
		Long-Run Costs and the Structure of Industry
		The Relationship between Long-Run and Short-Run Cost Curves
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
		Appendix 9A: Mathematical Extensions of the Theory of Costs
	Chapter 10 Perfect Competition
		Chapter Preview
		The Goal of Profit Maximization
			Example 10.1: Accounting Profits vs. Economic Profits
		The Four Conditions for Perfect Competition
		The Short-Run Condition for Profit Maximization
		The Short-Run Competitive Industry Supply
			Example 10.2: Industry Supply Curve
			Example 10.3: Consumer and Producer Surplus
		The Invisible Hand
		The Long-Run Competitive Industry Supply Curve
		ECONOMIC NATURALIST 10.1: Why Do Color Photographs Cost Less than Black-and-White Photographs?
		Applying the Competitive Model
		ECONOMIC NATURALIST 10.2: Why Did 18-Wheel Cargo Trucks Suddenly Begin Using Airfoils in the Mid-1970s?
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
	Chapter 11 Monopoly
		Chapter Preview
		Defining Monopoly
		Five Sources of Monopoly
		The Profit-Maximizing Monopolist
			Example 11.1: Marginal Revenue Curve
			Example 11.2: Profit Maximization
		A Monopolist Has No Supply Curve
		Price Discrimination
			Example 11.3: Profits in Two Different Markets
		ECONOMIC NATURALIST 11.1: Why Do Some Doctors and Lawyers Offer Discounts to People with Low Incomes?
		ECONOMIC NATURALIST 11.2: Why Do Theater Owners Offer Student Discounts on Admission Tickets but Not on Popcorn?
		The Efficiency Loss from Monopoly
		Public Policy toward Natural Monopoly
			Example 11.4: The Impact of Innovation on Profits
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
	Chapter 12 A Game-Theoretic Approach to Strategic Behavior
		Chapter Preview
		The Prisoner\'s Dilemma: An Introduction to the Theory of Games
		ECONOMIC NATURALIST 12.1: Why Do Cigarette Companies Advertise \"Too Much\"?
		ECONOMIC NATURALIST 12.2: Why Might a Company Make an Investment It Knew It Would Never Use?
		ECONOMIC NATURALIST 12.3: Why Would a Firm Build a Factory with More Capacity than It Would Ever Need?
		The Evolution of Strategic Preferences
			The Commitment Problem
			Illustration: The Cheating Problem
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
	Chapter 13 Oligopoly and Monopolistic Competition
		Chapter Preview
		Some Specific Oligopoly Models
			Example 13.1: The Cournot Model
			Example 13.2: The Bertrand Model
			Example 13.3: The Stackelberg Model
		Competition When There Are Increasing Returns to Scale
		Monopolistic Competition
		A Spatial Interpretation of Monopolistic Competition
		ECONOMIC NATURALIST 13.1: Why Are There Fewer Grocery Stores in Cities than There Were in 1930? Why Do Neighborhoods in New York City Have More Grocery Stores than Neighborhoods in LA?
		Consumer Preferences and Advertising
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
PART 4 Factor Markets
	Chapter 14 Labor
		Chapter Preview
		The Perfectly Competitive Firm\'s Demand for Labor
		An Imperfect Competitor\'s Demand for Labor
		The Supply of Labor
			Example 14.1: Labor Supply Curve
		ECONOMIC NATURALIST 14.1: Why Is It So Hard to Find a Taxi on Rainy Days?
			Example 14.2: Leisure Demand
		The Market Supply Curve
			Example 14.3: Market Supply
		Monopsony
		Minimum Wage Laws
		Labor Unions
		Discrimination in the Labor Market
		The Internal Wage Structure
		Winner-Take-All Markets
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
		Appendix 14A: The Economics of Workplace Safety
	Chapter 15 Capital
		Chapter Preview
		Financial Capital and Real Capital
		The Relationship between the Rental Rate and the Interest Rate
		The Criterion for Buying a Capital Good
		Interest Rate Determination
		Real versus Nominal Interest Rates
		The Market for Stocks and Bonds
		ECONOMIC NATURALIST 15.1: Why Is Owning Stock in a Monopoly No Better than Owning Stock in a Perfectly Competitive Firm?
		Economic Rent
		Peak-Load Pricing
		Exhaustible Resources as Inputs in Production
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
		Appendix 15A: More Detailed Look at Exhaustible Resource Allocation
PART 5 General Equilibrium and Welfare
	Chapter 16 Externalities, Property Rights, and the Coase Theorem
		Chapter Preview
		The Reciprocal Nature of Externalities
			Example 16.1: Shutdown Decision Part 1
			Example 16.2: Shutdown Decision Part 2
			Example 16.3: Efficient Negotiation Part 1
			Example 16.4: Efficient Negotiation Part 2
			Example 16.5: Negotiation at a Cost
			Example 16.6: Barriers to Negotiation
		Application: External Effects from Nuclear Power Plants
		Property Rights
		ECONOMIC NATURALIST 16.1: Why Does the Law Permit Airlines to Operate Flights over Private Land without Permission
		ECONOMIC NATURALIST 16.2: Why Does the Law of Trespass Not Apply along Waterfront Property?
		ECONOMIC NATURALIST 16.3: Why Are Property Rights Often Suspended during Storms?
		ECONOMIC NATURALIST 16.4: Why Do Building Height Limits Vary from City to City?
			Example 16.7: Tragedy of the Commons
			Example 16.8: Compromise vs. Cost
		Positive Externalities
		Positional Externalities
		Taxing Externalities
			Example 16.9: Taxing Externalities
			Example 16.10: Regulation vs. Taxation
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
	Chapter 17 General Equilibrium and Market Efficiency
		Chapter Preview
		A Simple Exchange Economy
		Efficiency in Production
		Efficiency in Product Mix
		Gains from International Trade
			Example 17.1: The Trade Decision
		Taxes in General Equilibrium
		Other Sources of Inefficiency
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
	Chapter 18 Government
		Chapter Preview
		Public Goods
		Private Provision of Public Goods
			Example 18.1: Free-Rider Problem
		Public Choice
			Example 18.2: Cost-Benefit Analysis vs. Majority Rule
			Example 18.3: Lobbying Wars
		Income Distribution
		Summary
		Review Questions
		Problems
		Answers to Concept Checks
Index
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