About the Authors |
Preface |
Introduction / Part 1: |
Microeconomics / Chapter 1: |
Optimal Production Decisions |
Pricing Policy |
Efficient Allocation of a Society's Resources |
Public Policy Concerning Market Structure |
Microeconomics: Problem Solving and Science |
Human Wants and Resources |
Technology |
Tasks Performed by an Economic System |
Our Mixed Capitalist System |
The Price System and Microeconomics |
Hungary's Rough Transition toward the Price System / Example 1.1: |
Model-Building and the Role of Models |
Evaluating a Model |
Summary |
Questions/Problems |
Demand and Supply / Chapter 2: |
Markets |
The Demand Side of the Market |
Coffee Bars Invade Manhattan / Example 2.1: |
The Supply Side of the Market |
The Price of Cotton: Highest since the Civil War / Example 2.2: |
Determinants of Price |
Price Floors and Ceilings |
Rent Control, California-Style: Mobile-Home Owners versus Park Owners / Example 2.3: |
Consumer Behavior and Market Demand / Part 2: |
Tastes and Preferences of the Consumer / Chapter 3: |
Consumer Preferences |
Indifference Curves |
The Concept of Utility |
The Marginal Rate of Substitution |
Deciphering the Shapes of Indifference Curves / Example 3.1: |
The Budget Line |
Equilibrium of the Consumer |
Consumer Choice and the New Phone Rates / Example 3.2: |
Corner Solutions |
Corner Solutions and Diminishing Marginal Rates of Substitution |
Revealed Preference and the Measurement of Indifference Curves |
Determinants of Consumer Tastes and Preferences |
The Food Stamp Program / Example 3.3: |
Budget Allocation by New York State: An Application |
Ordinal and Cardinal Utility / Appendix: |
Consumer Behavior and Individual Demand / Chapter 4: |
Effects of Changes in Consumer Money Income |
Expenditures and Income / Example 4.1: |
Effects of Changes in Commodity Prices |
Substition and Income Effects |
Energy Tax and Rebate Proposal / Example 4.2: |
Consumer Surplus |
Indexes of the Cost of Living |
Household Response to Higher Energy Prices and Their Associated Losses in Consumer Surplus / Example 4.3: |
Calculating a Cost-of-Living Index / Example 4.4: |
Derivation of the Market Demand Curve / Chapter 5: |
The Price Elasticity of Demand |
Residential Demand for Water / Example 5.1: |
The Income Elasticity of Demand |
The Cross-Price Elasticity of Demand |
Fur Sales Take a Hit / Example 5.2: |
Shifting Demand Curves |
The Seller's Side of the Market and Marginal Revenue |
Demand and the Distribution of Aggregate Income / Example 5.3: |
Industry and Firm Demand Curves |
The Measurement of Demand Curves |
Attracting Quality Students with Partial Scholarships / Example 5.4: |
Choices Involving Risk / Chapter 6: |
Probability |
Expected Monetary Value |
Investing in an Oil Venture: A Case Study |
The Expected Value of Perfect Information |
How Much Are Accurate Weather Forecasts Worth to Raisin Producers? A Case Study |
The Expected Value of Partial Information |
Should a Person Maximize Expected Monetary Value? |
Maximizing Expected Utility |
Should the Company Really Invest in the Oil Venture? |
Preferences Regarding Risk |
Hospitals and the Health Insurance Bind / Example 6.1: |
Why People Buy Insurance |
How Much Insurance Should an Individual Buy? |
Are Two Consultants Better Than One? / Example 6.2: |
Revisiting the Value of Information When People Are Averse to Risk |
Behavior in the Face of Risk |
The Precautionary Principle |
The Cost of Exposure Limits That Have Been Set by Applying the Precautionary Principle / Example 6.3: |
Demand for Airline Travel and the Pricing of Tickets / Cross-Chapter Case Part 2: |
The Firm: Its Technology and Costs / Part 3: |
The Firm and Its Technology / Chapter 7: |
Firm Owners and Managers: A Principal-Agent Problem |
Technology and Inputs |
The Short Run and the Long Run |
Is a CEO Really Worth Half a Billion Dollars per Year? / Example 7.1: |
The Production Function |
The Law of Diminishing Marginal Returns and the Geometry of Average and Marginal Product Curves |
The Production Function: Two Variable Inputs |
Isoquants |
Substitution among Inputs |
The Long Run and Returns to Scale |
The Measurement of Production Functions |
Should Two Kansas Wheat Farms Merge? / Example 7.2: |
Optimal Input Combination and Cost Functions / Chapter 8: |
Optimal Combination of Inputs |
Production of Wheat: An Application |
Costs |
Rice-Milling in Indonesia / Example 8.1: |
Pollution Control: An Application |
Social Costs versus Private Costs |
Explicit Costs versus Implicit Costs |
Proper Comparison of Alternatives |
Cost Functions in the Short Run |
Least-Cost Reductions of Carbon Emissions / Example 8.2: |
Cost Functions in the Long Run |
Economies of Scope |
The Measurement of Cost Functions |
The Shape of the Short-Run Marginal Cost Curve / Example 8.3: |
Production and Cost Theory at Work: The Cost of Climate Policy / Cross-Chapter Case Part 3: |
Market Structure, Price, and Output / Part 4: |
Perfect Competition / Chapter 9: |
Price Determination in the Short Run |
Auctions and Experimental Economics / Example 9.1: |
Price Determination in the Long Run |
What Would Be the Effects of National Dental Insurance? / Example 9.2: |
The Market for Sulfur Emissions Permits / Example 9.3: |
Agricultural Prices and Output: An Application |
Applying the Competitive Model / Chapter 10: |
Producer Surplus and Total Surplus |
Perfect Competition and the Maximization of Total Surplus |
The Effect of a Price Ceiling |
A Price Ceiling for Gasoline / Example 10.1: |
New York Apartments: A Case Study |
The Effect of a Price Floor |
Agricultural Price Supports: Another Case Study |
Protecting Domestic Producers: Tariffs and Quotas |
Restrictions on U.S. Imports of Japanese Autos: A Third Case Study |
Gains and Losses from Steel Import Quotas / Example 10.2: |
Effects on Price of an Excise Tax |
Deadweight Loss from an Excise Tax |
Should the Gasoline Tax Be Raised? / Example 10.3: |
Postcript |
Monopoly / Chapter 11: |
Short-Run Equilibrium Price and Output |
Long-Run Equilibrium Price and Output |
Playing the Slots at Foxwoods / Example 11.1: |
Multiplant Monopoly |
A Comparison of Monopoly with Perfect Competition |
Monopoly Power |
Price Discrimination |
The Microsoft Finding and the Value of Startup Software Companies / Example 11.2: |
Two-Part Tariffs and Tying |
Two-Part Tariffs in the National Football League / Example 11.3: |
Bundling: Another Pricing Technique |
Public Regulation of Monopoly |
Case Studies |
Monopolistic Competition and Oligopoly / Chapter 12: |
Monopolistic Competition |
Equilibrium Price and Output in the Short and Long Runs |
Excess Capacity and Product Diversity |
Markup Pricing |
Comparisons with Perfect Competition and Monopoly |
Advertising Expenditures: A Simple Model |
Optimal Advertising Expenditures: A Graphical Analysis |
The Social Value of Advertising |
Advertising, Spectacles, and the FTC / Example 12.1: |
Oligopoly |
The Nash Equilibrium |
An Example of a Nash Equilibrium: The Cournot Model |
The Stackelberg Model |
The Bertrand Model |
Collusion and Cartels |
The Retail Market for Tires / Example 12.2: |
The Instability of Cartels |
The OPEC Oil Cartel: An Application |
The International Supply of Crude Oil / Example 12.3: |
Price Leadership |
Entry and Contestable Markets |
Game Theory and Strategic Behavior / Chapter 13: |
The Theory of Games |
Game Trees |
Nash Equilibria: Further Discussion |
Maximin Strategies |
Should Amherst Buy All Its Steel from Duquesne? / Example 13.1: |
The Prisoners' Dilemma |
Cheating on a Cartel Agreement |
The Repeated Prisoners' Dilemma and the Tit-for-Tat Strategy |
Strategic Moves |
The Role of Incentives and Contracts / Example 13.2: |
Threats: Empty and Credible |
Deterrence of Entry |
Limit Pricing |
First-Mover Advantages |
How Governments Can Tilt the Outcome of Oligopoly / Example 13.3: |
Capacity Expansion and Preemption |
Nonprice Competition |
The Effects of Oligopoly |
Shaking the Tree of Global Telecommunications Markets / Cross-Chapter Case Part 4: |
Markets for Inputs / Part 5: |
Price and Employment of Inputs / Chapter 14: |
Profit Maximization and Input Employment |
The Firm's Demand Curve: The Case of One Variable Input |
The Firm's Demand Curve: The Case of Several Variable Inputs |
The Market Demand Curve |
Determinants of the Price Elasticity of Demand for an Input |
The Market Supply Curve |
Income and Substitution Effects in the Supply of Labor / Example 14.1: |
Equilibrium Price and Employment of an Input |
Rent |
Imperfectly Competitive Output Markets |
Does Immigration Benefit the United States? / Example 14.2: |
Monopsony |
Effects of Increasing the Minimum Wage / Example 14.3: |
Investment Decisions / Chapter 15: |
Intertemporal Choice: Consumption and Saving |
Interest Rates and Investment |
The Equilibrium Level of Interest Rates |
Present Value |
Valuing a Stream of Payments |
The Net Present Value Rule for Investment Decisions |
Neil Simon Goes Off-Broadway / Example 15.1: |
The Investment Decision: An Example |
Real versus Nominal Interest Rates |
Risk and Diversification |
Diversifiable and Nondiversifiable Risk |
The Capital-Asset Pricing Model |
Including Risk in Net Present Value Calculations: Some Examples |
The Stock Market: The Efficient Markets Hypothesis |
Internal Rates of Return and Bond Yields |
How Much Is a Bond Worth? |
Game Theory in Action: Investment as a Strategic Decision / Example 15.2: |
Pricing Exhaustible Resources |
Game Theory in Action: A Tit-for-Tat Time Horizon / Example 15.3: |
Sex Discrimination and Comparable Worth / Cross-Chapter Case Part 5: |
Information, Efficiency, and Government / Part 6: |
General Equilibrium Analysis and Resource Allocation / Chapter 16: |
Partial Equilibrium Analysis versus General Equilibrium Analysis |
The Existence of General Equilibrium |
A Simple Model of General Equilibrium |
Deregulation of Railroads and Trucks / Example 16.1: |
Resource Allocation and the Edgeworth Box Diagram |
Exchange |
Production |
Allocation of Fissionable Material / Example 16.2: |
The Production Possibilities Curve |
Production and Exchange |
The Promotion of Economic Efficiency / Chapter 17: |
A Definition of Economic Efficiency |
Marginal Conditions for Economic Efficiency |
The Utility Possibilities Curve |
Equity Considerations |
John Rawls on Social Justice / Example 17.1: |
Perfect Competition and Economic Efficiency |
External Economies and Diseconomies |
External Diseconomies on the Highways / Example 17.2: |
Increasing Returns, Public Goods, and Imperfect Information |
Static Efficiency and Economic Progress |
Fairness, Equity, and Efficiency / Example 17.3: |
Economic Benefits from Free Trade |
The Prevalence of Asymmetric Information / Chapter 18: |
Used Cars: An Example of Asymmetric Information |
A Graphical Analysis of the Market for Used Cars |
Asymmetric Information in the Fixture Market / Example 18.1: |
Asymmetric Information and Market Failure |
Adverse Selection: A Problem of Hidden Information |
Consequences of Adverse Selection |
Market Signaling |
Dawat, McDonald's, and the Importance of Reputation / Example 18.2: |
Moral Hazard: A Problem of Hidden Action |
Principal-Agent Problems |
Game Theory in Action: Superior Knowledge as a Deterrent to Entry / Example 18.3: |
Efficiency Wage Theory |
Public Goods, Externalities, and the Role of Government / Chapter 19: |
Characteristics of a Public Good |
Efficient Output of a Public Good |
Provision of Public Goods |
The Effect of Voting Rules / Example 19.1: |
Externalities: The Case of Environmental Pollution |
Game Theory in Action: The Tragedy of the Commons from a Strategic Perspective / Example 19.2: |
Property Rights and Coase's Theorem |
Government Intervention and Benefit-Cost Analysis |
Economic Efficiency and Global Policy to Combat Climate Change / Example 19.3: |
Anemia Reduction in Indonesia, Kenya, and Mexico: An Application |
Limitations of Government Effectiveness |
The FCC and the "Biggest Auction in the Known Universe" / Cross-Chapter Case Part 6: |
Glossary of Terms |
Brief Answers to Odd Numbered Questions |
Index |