Principles of Microeconomics

About the Author......Page 8
Brief Contents......Page 9
Preface to the Student......Page 11
Acknowledgments......Page 13
Contents......Page 19
Part I: Introduction......Page 27
Ch 1: Ten Principles of Economics......Page 29
1-1: How People Make Decisions......Page 30
1-2: How People Interact......Page 35
1-3: How the Economy as a Whole Works......Page 39
Summary......Page 42
Ch 2: Thinking like an Economist......Page 45
2-1: The Economist as Scientist......Page 46
2-2: The Economist as Policy Adviser......Page 53
2-3: Why Economists Disagree......Page 56
Summary......Page 60
Appendix: Graphing: A Brief Review......Page 63
Ch 3: Interdependence and the Gains from Trade......Page 73
3-1: A Parable for the Modern Economy......Page 74
3-2: Comparative Advantage: The Driving Force of Specialization......Page 78
3-3: Applications of Comparative Advantage......Page 81
3-4: Conclusion......Page 84
Summary......Page 85
Part II: How Markets Work......Page 89
Ch 4: The Market Forces of Supply and Demand......Page 91
4-1: Markets and Competition......Page 92
4-2: Demand......Page 93
4-3: Supply......Page 99
4-4: Supply and Demand Together......Page 103
4-5: Conclusion: How Prices Allocate Resources......Page 109
Summary......Page 110
Ch 5: Elasticity and Its Application......Page 115
5-1: The Elasticity of Demand......Page 116
5-2: The Elasticity of Supply......Page 124
5-3: Three Applications of Supply, Demand, and Elasticity......Page 127
Summary......Page 133
Ch 6: Supply, Demand, and Government Policies......Page 137
6-1: Controls on Prices......Page 138
6-2: Taxes......Page 147
6-3: Conclusion......Page 154
Summary......Page 155
Part III: Markets and Welfare......Page 159
Ch 7: Consumers, Producers, and the Efficiency of Markets......Page 161
7-1: Consumer Surplus......Page 162
7-2: Producer Surplus......Page 167
7-3: Market Efficiency......Page 170
7-4: Conclusion: Market Efficiency and Market Failure......Page 176
Summary......Page 177
Ch 8: Application: The Costs of Taxation......Page 181
8-1: The Deadweight Loss of Taxation......Page 182
8-2: The Determinants of the Deadweight Loss......Page 186
8-3: Deadweight Loss and Tax Revenue as Taxes Vary......Page 189
Summary......Page 194
Ch 9: Application: International Trade......Page 197
9-1: The Determinants of Trade......Page 198
9-2: The Winners and Losers from Trade......Page 200
9-3: The Arguments for Restricting Trade......Page 208
9-4: Conclusion......Page 214
Summary......Page 215
Part IV: The Economics of the Public Sector......Page 219
Ch 10: Externalities......Page 221
10-1: Externalities and Market Inefficiency......Page 223
10-2: Public Policies toward Externalities......Page 228
10-3: Private Solutions to Externalities......Page 234
10-4: Conclusion......Page 237
Summary......Page 238
Ch 11: Public Goods and Common Resources......Page 241
11-1: The Different Kinds of Goods......Page 242
11-2: Public Goods......Page 244
11-3: Common Resources......Page 249
Summary......Page 254
Ch 12: The Design of the Tax System......Page 259
12-1: A Financial Overview of the U.S. Government......Page 260
12-2: Taxes and Efficiency......Page 268
12-3: Taxes and Equity......Page 272
11-4: Conclusion: The Trade-Off between Equity and Efficiency......Page 278
Summary......Page 279
Part V: Firm Behavior and the Organization of Industry......Page 283
Ch 13: The Costs of Production......Page 285
13-1: What are Costs?......Page 286
13-2: Production and Costs......Page 289
13-3: The Various Measures of Cost......Page 291
13-4: Costs in the Short Run and in the Long Run......Page 297
Summary......Page 300
Ch 14: Firms in Competitive Markets......Page 305
14-1: What is a Competitive Market?......Page 306
14-2: Profit Maximization and the Competitive Firm's Supply Curve......Page 308
14-3: The Supply Curve in a Competitive Market......Page 315
14-4: Conclusion: Behind the Supply Curve......Page 321
Summary......Page 322
Ch 15: Monopoly......Page 325
15-1: Why Monopolies Arise......Page 326
15-2: How Monopolies Make Production and Pricing Decisions......Page 329
15-3: The Welfare Cost of Monopolies......Page 336
15-4: Price Discrimination......Page 340
15-5: Public Policy toward Monopolies......Page 345
15-6: Conclusion: The Prevalence of Monopolies......Page 348
Summary......Page 349
Ch 16: Monopolistic Competition......Page 355
16-1: Between Monopoly and Perfect Competition......Page 356
16-2: Competition with Differentiated Products......Page 358
16-3: Advertising......Page 364
16-4: Conclusion......Page 369
Summary......Page 370
Ch 17: Oligopoly......Page 373
17-1: Markets with Only a Few Sellers......Page 374
17-2: The Economics of Cooperation......Page 379
17-3: Public Policy toward Oligopolies......Page 386
17-4: Conclusion......Page 390
Summary......Page 392
Part VI: The Economics of Labor Markets......Page 397
Ch 18: The Markets for the Factors of Production......Page 399
18-1: The Demand for Labor......Page 400
18-2: The Supply of Labor......Page 406
18-3: Equilibrium in the Labor Market......Page 407
18-4: The Other Factors of Production: Land and Capital......Page 412
Summary......Page 416
Ch 19: Earnings and Discrimination......Page 421
19-1: Some Determinants of Equilibrium Wages......Page 422
19-2: The Economics of Discrimination......Page 429
19-3: Conclusion......Page 434
Summary......Page 435
Ch 20: Income Inequality and Poverty......Page 439
20-1: The Measurement of Inequality......Page 440
20-2: The Political Philosophy of Redistributing Income......Page 447
20-3: Policies to Reduce Poverty......Page 450
20-4: Conclusion......Page 454
Summary......Page 456
Part VII: Topics for Further Study......Page 459
Ch 21: The Theory of Consumer Choice......Page 461
21-1: The Budget Constraint: What the Consumer Can Afford......Page 462
21-2: Preferences: What the Consumer Wants......Page 463
21-3: Optimization: What the Consumer Chooses......Page 468
21-4: Three Applications......Page 475
21-5: Conclusion: Do People Really Think This Way?......Page 482
Summary......Page 483
Ch 22: Frontiers of Microeconomics......Page 487
22-1: Asymmetric Information......Page 488
22-2: Political Economy......Page 493
22-3: Behavioral Economics......Page 497
22-4: Conclusion......Page 502
Summary......Page 504
Glossary......Page 507
Index......Page 511