Principles of Microeconomics, 5th edition

Front Cover......Page 1
Title Page......Page 4
Copyright......Page 5
Table of Contents......Page 17
Preface: To the Student......Page 10
PART I: INTRODUCTION......Page 26
CHAPTER 1 TEN PRINCIPLES OF ECONOMICS......Page 28
How People Make Decisions......Page 29
How People Interact......Page 33
How the Economy as a Whole Works......Page 37
Conclusion......Page 40
Key Concepts......Page 42
Problems and Applications......Page 43
CHAPTER 2 THINKING LIKE AN ECONOMIST......Page 46
The Economist as Scientist......Page 47
The Economist as Policy Adviser......Page 55
Why Economists Disagree......Page 59
Let’s Get Going......Page 61
Problems and Applications......Page 63
APPENDIX: Graphing: A Brief Review......Page 65
CHAPTER 3 INTERDEPENDENCE AND THE GAINS FROM TRADE......Page 74
A Parable for the Modern Economy......Page 75
Comparative Advantage: The Driving Force of Specialization......Page 79
Applications of Comparative Advantage......Page 82
Key Concepts......Page 85
Problems and Applications......Page 86
PART II: HOW MARKETS WORK......Page 88
CHAPTER 4 THE MARKET FORCES OF SUPPLY AND DEMAND......Page 90
Markets and Competition......Page 91
Demand......Page 92
Supply......Page 98
Supply and Demand Together......Page 102
Conclusion: How Prices Allocate Resources......Page 108
Summary......Page 110
Questions for Review......Page 111
Problems and Applications......Page 112
CHAPTER 5 ELASTICITY AND ITS APPLICATION......Page 114
The Elasticity of Demand......Page 115
The Elasticity of Supply......Page 124
Three Applications of Supply, Demand, and Elasticity......Page 127
Summary......Page 133
Questions for Review......Page 134
Problems and Applications......Page 135
CHAPTER 6 SUPPLY, DEMAND, AND GOVERNMENT POLICIES......Page 138
Controls on Prices......Page 139
Taxes......Page 148
Conclusion......Page 155
Questions for Review......Page 156
Problems and Applications......Page 157
PART III: MARKETS AND WELFARE......Page 160
CHAPTER 7 CONSUMERS, PRODUCERS, AND THE EFFICIENCY OF MARKETS......Page 162
Consumer Surplus......Page 163
Producer Surplus......Page 168
Market Efficiency......Page 172
Conclusion: Market Efficiency and Market Failure......Page 177
Summary......Page 179
Problems and Applications......Page 180
CHAPTER 8 APPLICATION: THE COSTS OF TAXATION......Page 184
The Deadweight Loss of Taxation......Page 185
The Determinants of the Deadweight Loss......Page 189
Deadweight Loss and Tax Revenue as Taxes Vary......Page 192
Summary......Page 197
Problems and Applications......Page 198
CHAPTER 9 APPLICATION: INTERNATIONAL TRADE......Page 202
The Determinants of Trade......Page 203
The Winners and Losers from Trade......Page 205
The Arguments for Restricting Trade......Page 213
Conclusion......Page 219
Summary......Page 220
Problems and Applications......Page 221
PART IV: THE ECONOMICS OF THE PUBLIC SECTOR......Page 226
CHAPTER 10 EXTERNALITIES......Page 228
Externalities and Market Inefficiency......Page 229
Public Policies toward Externalities......Page 234
Private Solutions to Externalities......Page 240
Conclusion......Page 244
Key Concepts......Page 245
Problems and Applications......Page 246
CHAPTER 11 PUBLIC GOODS AND COMMON RESOURCES......Page 250
The Different Kinds of Goods......Page 251
Public Goods......Page 252
Common Resources......Page 257
Conclusion: The Importance of Property Rights......Page 262
Problems and Applications......Page 263
CHAPTER 12 THE DESIGN OF THE TAX SYSTEM......Page 266
A Financial Overview of the U.S. Government......Page 267
Taxes and Efficiency......Page 274
Taxes and Equity......Page 278
Conclusion: The Trade-off between Equity and Efficiency......Page 283
Key Concepts......Page 285
Problems and Applications......Page 286
PART V: FIRM BEHAVIOR AND THE ORGANIZATION OF INDUSTRY......Page 290
CHAPTER 13 THE COSTS OF PRODUCTION......Page 292
What Are Costs?......Page 293
Production and Costs......Page 296
The Various Measures of Cost......Page 299
Costs in the Short Run and in the Long Run......Page 305
Conclusion......Page 307
Summary......Page 308
Questions for Review......Page 309
Problems and Applications......Page 310
CHAPTER 14 FIRMS IN COMPETITIVE MARKETS......Page 314
What Is a Competitive Market?......Page 315
Profit Maximization and the Competitive Firm’s Supply Curve......Page 317
The Supply Curve in a Competitive Market......Page 325
Conclusion: Behind the Supply Curve......Page 331
Questions for Review......Page 332
Problems and Applications......Page 333
CHAPTER 15 MONOPOLY......Page 336
Why Monopolies Arise......Page 337
How Monopolies Make Production and Pricing Decisions......Page 340
The Welfare Cost of Monopolies......Page 347
Price Discrimination......Page 351
Public Policy toward Monopolies......Page 357
Conclusion: The Prevalence of Monopolies......Page 362
Summary......Page 363
Questions for Review......Page 364
Problems and Applications......Page 365
CHAPTER 16 MONOPOLISTIC COMPETITION......Page 370
Between Monopoly and Perfect Competition......Page 371
Competition with Differentiated Products......Page 373
Advertising......Page 380
Conclusion......Page 386
Questions for Review......Page 387
Problems and Applications......Page 388
CHAPTER 17 OLIGOPOLY......Page 390
Markets with Only a Few Sellers......Page 391
The Economics of Cooperation......Page 395
Public Policy toward Oligopolies......Page 403
Conclusion......Page 409
Questions for Review......Page 410
Problems and Applications......Page 411
PART VI: THE ECONOMICS OF LABOR MARKETS......Page 414
CHAPTER 18 THE MARKETS FOR THE FACTORS OF PRODUCTION......Page 416
The Demand for Labor......Page 417
The Supply of Labor......Page 424
Equilibrium in the Labor Market......Page 425
The Other Factors of Production: Land and Capital......Page 430
Conclusion......Page 434
Questions for Review......Page 435
Problems and Applications......Page 436
CHAPTER 19 EARNINGS AND DISCRIMINATION......Page 438
Some Determinants of Equilibrium Wages......Page 439
The Economics of Discrimination......Page 447
Summary......Page 454
Problems and Applications......Page 455
CHAPTER 20 INCOME INEQUALITY AND POVERTY......Page 458
The Measurement of Inequality......Page 459
The Political Philosophy of Redistributing Income......Page 467
Policies to Reduce Poverty......Page 470
Conclusion......Page 476
Questions for Review......Page 477
Problems and Applications......Page 478
PART VII: TOPICS FOR FURTHER STUDY......Page 480
CHAPTER 21 THE THEORY OF CONSUMER CHOICE......Page 482
The Budget Constraint: What the Consumer Can Afford......Page 483
Preferences: What the Consumer Wants......Page 484
Optimization: What the Consumer Chooses......Page 489
Three Applications......Page 496
Conclusion: Do People Really Think This Way?......Page 504
Questions for Review......Page 505
Problems and Applications......Page 506
CHAPTER 22 FRONTIERS OF MICROECONOMICS......Page 508
Asymmetric Information......Page 509
Political Economy......Page 514
Behavioral Economics......Page 519
Conclusion......Page 525
Questions for Review......Page 526
Problems and Applications......Page 527
Glossary......Page 530
Index......Page 534