Introduction to Economics | p. 1 |
Introducing the Economic Way of Thinking | p. 3 |
The Problem of Scarcity | p. 4 |
Scarce Resources and Production | p. 4 |
Economics: The Study of Scarcity and Choice | p. 6 |
The Methodology of Economics | p. 7 |
Hazards of the Economic Way of Thinking | p. 8 |
You Make the Call: Can You Prove There Is No Trillion-Dollar Person? | p. 10 |
You Make the Call: Should Minnesota State Join a Big-Time Athletic Conference? | p. 11 |
Why Do Economists Disagree? | p. 11 |
Economics in Practice: Mops and Brooms, the Boston Snow Index, the Super Bowl, and Other Economic Indicators | p. 12 |
Analyze the Issue | p. 12 |
Economics in Practice: Does Raising the Minimum Wage Help the Working Poor? | p. 14 |
Applying Graphs to Economics | p. 21 |
A Direct Relationship | p. 21 |
An Inverse Relationship | p. 22 |
The Slope of a Straight Line | p. 23 |
A Three-Variable Relationship in One Graph | p. 24 |
A Helpful Study Hint for Using Graphs | p. 26 |
Production Possibilities and Opportunity Cost | p. 31 |
The Three Fundamental Economic Questions | p. 31 |
Opportunity Cost | p. 32 |
Marginal Analysis | p. 33 |
The Production Possibilities Curve | p. 34 |
The Law of Increasing Opportunity Costs | p. 36 |
Shifting the Production Possibilities Curve | p. 37 |
Economics in Practice: Federal Express Wasn't an Overnight Success | p. 39 |
Analyze the Issue | p. 40 |
Present Investment and the Future Production Possibilities Curve | p. 40 |
You Make the Call: What Does the Peace Dividend Really Mean? | p. 40 |
International Economics: When Japan Stumbles, Where Is It on the Curve? | p. 42 |
The Microeconomy | p. 49 |
Market Demand and Supply | p. 51 |
The Law of Demand | p. 51 |
The Distinction Between Changes in Quantity Demanded and Changes in Demand | p. 53 |
Nonprice Determinants of Demand | p. 54 |
You Make the Call: Can Gasoline Become an Exception to the Law of Demand? | p. 57 |
The Law of Supply | p. 58 |
You Make the Call: Can the Law of Supply be Repealed? | p. 61 |
The Distinction Between Changes in Quantity Supplied and Changes in Supply | p. 61 |
Nonprice Determinants of Supply | p. 62 |
You Make the Call: Can the Price System Eliminate Scarcity? | p. 64 |
A Market Supply and Demand Analysis | p. 65 |
Economics in Practice: PC Prices Fall Below $400 | p. 67 |
Analyze the Issue | p. 67 |
International Economics: The Market Approach to Organ Shortages | p. 70 |
Markets in Action | p. 77 |
Changes in Market Equilibrium | p. 77 |
You Make the Call: Why the Higher Price for Lower Cholesterol? | p. 81 |
Can the Laws of Supply and Demand be Repealed? | p. 81 |
Market Failure | p. 85 |
Economics in Practice: Rigging the Market for Milk | p. 86 |
Analyze the Issue | p. 86 |
You Make the Call: Is There Price-Fixing at the Ticket Window? | p. 87 |
You Make the Call: Should There Be a War on Drugs? | p. 90 |
Economics in Practice: Can Vouchers Fix Our Schools? | p. 91 |
Applying Supply and Demand Analysis to Health Care | p. 97 |
The Impact of Health Insurance | p. 97 |
Shifts in the Demand for Health Care | p. 99 |
Shifts in the Supply of Health Care | p. 100 |
Health Care Reform Proposals | p. 100 |
Price Elasticity of Demand | p. 103 |
Price Elasticity of Demand | p. 104 |
Price Elasticity of Demand Variations along a Demand Curve | p. 109 |
You Make the Call: Will Fliers Flock to Low Summer Fares? | p. 111 |
Determinants of Price Elasticity of Demand | p. 111 |
You Make the Call: Can Trade Sanctions Affect Elasticity of Demand for Cars? | p. 113 |
International Economics: Cigarette Smoking around the World | p. 114 |
Production Costs | p. 121 |
Costs and Profit | p. 121 |
You Make the Call: Should the Professor Go or Stay? | p. 123 |
Economics in Practice: Publishers Experiment with Lower Prices | p. 124 |
Analyze the Issue | p. 124 |
Short-Run Production Costs | p. 125 |
Short-Run Cost Formulas | p. 128 |
Long-Run Production Costs | p. 131 |
Different Scales of Production | p. 134 |
Economics in Practice: Invasion of the Monster Movie Theaters | p. 136 |
Perfect Competition | p. 143 |
Perfect Competition | p. 143 |
Short-Run Profit Maximization for a Perfectly Competitive Firm | p. 146 |
Short-Run Loss Minimization for a Perfectly Competitive Firm | p. 149 |
You Make the Call: Should Motels Offer Rooms at the Beach for Only $20 a Night? | p. 153 |
Short-Run Supply Curves Under Perfect Competition | p. 153 |
Long-Run Supply Curves Under Perfect Competition | p. 155 |
Economics in Practice: Gators Snapping up Profits | p. 158 |
Analyze the Issue | p. 159 |
You Make the Call: Are You in Business for the Long Run? | p. 159 |
Monopoly | p. 165 |
The Monopoly Market Structure | p. 166 |
Price and Output Decisions for a Monopolist | p. 168 |
International Economics: Monopolies around the World | p. 169 |
Price Discrimination | p. 173 |
Economics in Practice: The Standard Oil Monopoly | p. 174 |
You Make the Call: Why Don't Adults Pay More for Popcorn at the Movies? | p. 176 |
Comparing Monopoly and Perfect Competition | p. 176 |
The Case against and for Monopoly | p. 178 |
Economics in Practice: New York Taxicabs: Where Have All the Fare Flags Gone? | p. 179 |
Monopolistic Competition and Oligopoly | p. 187 |
The Monopolistic Competition Market Structure | p. 188 |
Price and Output Decisions for a Monopolistically Competitive Firm | p. 189 |
Economics in Practice: The Advertising Game | p. 190 |
Analyze the Issue | p. 190 |
Comparing Monopolistic Competition and Perfect Competition | p. 193 |
The Oligopoly Market Structure | p. 194 |
Price and Output Decisions for an Oligopolist | p. 196 |
International Economics: Major Cartels in Global Markets | p. 198 |
An Evaluation of Oligopoly | p. 199 |
Review of the Four Market Structures | p. 199 |
Economics in Practice: An Economist Goes to the Final Four | p. 200 |
Analyze the Issue | p. 200 |
You Make the Call: Which Model Fits the Cereal Aisle? | p. 201 |
Labor Markets and Income Distribution | p. 207 |
The Labor Market Under Perfect Competition | p. 208 |
Labor Unions | p. 213 |
Union Membership Around the World | p. 216 |
The Distribution of Income | p. 217 |
Equality Versus Efficiency | p. 219 |
Poverty | p. 220 |
Discrimination | p. 224 |
Economics in Practice: Pulling on the Strings of the Welfare Safety Net | p. 225 |
Analyze the Issue | p. 226 |
Economics in Practice: Is a Librarian Worth an Electrician? | p. 227 |
Analyze the Issue | p. 228 |
You Make the Call: Should the Law Protect Females? | p. 228 |
The Macroeconomy and Fiscal Policy | p. 233 |
Gross Domestic Product | p. 235 |
Gross Domestic Product | p. 236 |
Measuring GDP | p. 237 |
You Make the Call: How Much Does Mario Add to GDP? | p. 242 |
GDP in Other Countries | p. 242 |
GDP Shortcomings | p. 243 |
Other National Accounts | p. 244 |
Economics in Practice: Is GDP a False Beacon Steering Us onto the Rocks? | p. 245 |
Analyze the Issue | p. 245 |
Changing Nominal GDP to Real GDP | p. 249 |
You Make the Call: Is the Economy Up or Down? | p. 251 |
Business Cycles and Unemployment | p. 257 |
The Business-Cycle Roller Coaster | p. 258 |
You Make the Call: Where are We on the Business-Cycle Roller Coaster? | p. 262 |
Total Spending and the Business Cycle | p. 263 |
Unemployment | p. 264 |
Types of Unemployment | p. 268 |
The Goal of Full Employment | p. 270 |
You Make the Call: What Kind of Unemployment Did the Invention of the Wheel Cause? | p. 271 |
International Economics: Is it a Robot's World? | p. 272 |
Analyze the Issue | p. 272 |
The GDP Gap | p. 273 |
Economics In Practice: Brother Can You Spare a Dime? | p. 274 |
Inflation | p. 281 |
Meaning and Measurement of Inflation | p. 282 |
You Make the Call: The College Education Price Index | p. 285 |
Economics in Practice: Does It Cost More to Laugh? | p. 286 |
Analyze the Issue | p. 287 |
Consequences of Inflation | p. 289 |
Demand-Pull and Cost-Push Inflation | p. 292 |
Inflation in Other Countries | p. 293 |
International Economics: When the Inflation Rate Is 116,000 Percent, Prices Change by the Hour | p. 295 |
Aggregate Demand and Supply | p. 301 |
The Aggregate Demand Curve | p. 302 |
Reasons for the Aggregate Demand Curve's Shape | p. 303 |
Nonprice-Level Determinants of Aggregate Demand | p. 304 |
The Aggregate Supply Curve | p. 306 |
Three Ranges of the Aggregate Supply Curve | p. 309 |
Changes in the AD-AS Macroeconomic Equilibrium | p. 311 |
Nonprice-Level Determinants of Aggregate Supply | p. 314 |
Cost-Push and Demand-Pull Inflation Revisited | p. 315 |
Economics in Practice: Was John Maynard Keynes Right? | p. 317 |
Analyze the Issue | p. 318 |
You Make the Call: Would the Greenhouse Effect Cause Inflation, Unemployment, or Both? | p. 319 |
Fiscal Policy | p. 325 |
Discretionary Fiscal Policy | p. 326 |
Automatic Stabilizers | p. 333 |
You Make the Call: Walking the Balanced Budget Tightrope | p. 333 |
Supply-Side Fiscal Policy | p. 335 |
Economics in Practice: The Laffer Curve | p. 338 |
The Public Sector | p. 345 |
Government Size and Growth | p. 346 |
The Tax Burden in Other Countries | p. 350 |
The Art of Taxation | p. 353 |
Economics in Practice: Is It Time to Trash the 1040s? | p. 358 |
Analyze the Issue | p. 358 |
Public Choice Theory | p. 359 |
You Make the Call: What Does Public Choice Say about a Budget Deficit? | p. 362 |
Federal Deficits, Surpluses, and the National Debt | p. 369 |
The Federal Budget Balancing Act | p. 370 |
Economics in Practice: The Great Federal Budget Surplus Debate | p. 376 |
Analyze the Issue | p. 377 |
Why Worry Over the National Debt? | p. 377 |
You Make the Call: What's Behind the National Debt? | p. 379 |
Economics in Practice: How Real Is the National Debt? | p. 385 |
Money, Banking, and Monetary Policy | p. 391 |
Money and the Federal Reserve System | p. 393 |
What Makes Money Money? | p. 394 |
Other Desirable Properties of Money | p. 396 |
You Make the Call: Are Debit Cards Money? | p. 396 |
International Economics: Fixed Assets, or Why a Loan in Yap Is Hard to Roll Over | p. 397 |
Analyze the Issue | p. 397 |
What Stands Behind Our Money? | p. 397 |
The Three Money-Supply Definitions | p. 398 |
The Federal Reserve System | p. 401 |
What a Federal Reserve Bank Does | p. 404 |
The U.S. Banking Revolution | p. 406 |
Economics in Practice: The Wreck of Lincoln Savings and Loan | p. 407 |
Money Creation | p. 413 |
Money Creation Begins | p. 414 |
How a Single Bank Creates Money | p. 414 |
Multiplier Expansion of Money by the Banking System | p. 419 |
How Monetary Policy Creates Money | p. 421 |
You Make the Call: Who Has More Dollar Creation Power? | p. 423 |
Monetary Policy Shortcomings | p. 426 |
Economics in Practice: How Does the Fomc Really Work? | p. 427 |
Monetary Policy | p. 433 |
The Keynesian View of the Role of Money | p. 434 |
You Make the Call: What Does the Money Supply Curve Look Like When the Fed Targets an Interest Rate? | p. 438 |
The Monetarist View of the Role of Money | p. 442 |
You Make the Call: A Horse of Which Color? | p. 447 |
A Comparison of Macroeconomic Views | p. 447 |
Economics in Practice: Monetary Policy during the Great Depression | p. 450 |
The International Economy | p. 457 |
International Trade and Finance | p. 459 |
Why Nations Need Trade | p. 460 |
Comparative and Absolute Advantage | p. 463 |
You Make the Call: Do Nations With an Advantage Always Trade? | p. 464 |
Free Trade Versus Protectionism | p. 465 |
Arguments for Protection | p. 466 |
International Economics: World Trade Slips on Banana Peel | p. 468 |
Analyze the Issue | p. 468 |
The Balance of Payments | p. 469 |
You Make the Call: Should Everyone Keep a Balance of Payments? | p. 473 |
Exchange Rates | p. 473 |
International Economics: Return to the Gold Standard? | p. 480 |
Economies in Transition | p. 489 |
Basic Types of Economic Systems | p. 490 |
International Economics: Choosing a System | p. 496 |
Analyze the Issue | p. 496 |
The "Isms" | p. 497 |
You Make the Call: To Plan or Not to Plan--That is the Question | p. 501 |
Comparing Economic Systems | p. 501 |
Economies in Transition | p. 501 |
International Economics: China Seeks Free-Market Revolution | p. 504 |
Analyze the Issue | p. 505 |
International Economics: Hong Kong: A Limping Pacific Rim Tiger | p. 506 |
Answers to Odd-Numbered Questions and Problems | p. 511 |
Practice Quiz Answers | p. 531 |
Glossary | p. 534 |
Index | p. 541 |
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