Summary

For two-semester courses in the principles of economics.

The relevance of economics shown through real-world business examples

The authors of Economics help foster interest in the discipline concepts, and make the key principles of this topic relevant to readers’ lives by demonstrating how real businesses use economics to make decisions every day. With an ever changing US and world economy, the 7th Edition has been updated with the latest developments using new real-world business and policy examples. Regardless of their future career path -- opening an art studio, trading on Wall Street, or bartending at the local pub, readers will benefit from understanding the economic forces behind their work.

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Author Biography

R. Glenn Hubbard, policymaker, professor, and researcher. Hubbard is the dean and Russell L. Carson Professor of Finance and Economics in the Graduate School of Business at Columbia University, and professor of economics in Columbia’s Faculty of Arts and Sciences. He is also a research associate of the National Bureau of Economic Research and a director of Automatic Data Processing, Black Rock Closed-End Funds, and MetLife. He received his PhD in economics from Harvard University in 1983. From 2001 to 2003, he served as chairman of the White House Council of Economic Advisers and chairman of the OECD Economic Policy Committee, and from 1991 to 1993, he was deputy assistant secretary of the US Treasury Department. He currently serves as co-chair of the nonpartisan Committee on Capital Markets Regulation. Hubbard’s fields of specialization are public economics, financial markets and institutions, corporate finance, macroeconomics, industrial organization, and public policy. He is the author of more than 100 articles in leading journals, including American Economic Review, Brookings Papers on Economic Activity, Journal of Finance, Journal of Financial Economics, Journal of Money, Credit, and Banking, Journal of Political Economy, Journal of Public Economics, Quarterly Journal of Economics, RAND Journal of Economics, and Review of Economics and Statistics. His research has been supported by grants from the National Science Foundation, the National Bureau of Economic Research, and numerous private foundations.

Tony O’Brien, award-winning professor and researcher. O’Brien is a professor of economics at Lehigh University. He received his PhD from the University of California, Berkeley, in 1987. He has taught principles of economics for more than 20 years, in both large sections and small honors classes. He received the Lehigh University Award for Distinguished Teaching. He was formerly the director of the Diamond Center for Economic Education and was named a Dana Foundation Faculty Fellow and Lehigh Class of 1961 Professor of Economics. He has been a visiting professor at the University of California, Santa Barbara, and the Graduate School of Industrial Administration at Carnegie Mellon University. O’Brien’s research has dealt with issues such as the evolution of the US automobile industry, the sources of US economic competitiveness, the development of US trade policy, the causes of the Great Depression, and the causes of black–white income differences. His research has been published in leading journals, including American Economic Review, Quarterly Journal of Economics, Journal of Money, Credit, and Banking, Industrial Relations, Journal of Economic History, and Explorations in Economic History. His research has been supported by grants from government agencies and private foundations.

PART I: INTRODUCTION

1. Economics: Foundations and Models

Appendix: Using Graphs and Formulas

2. Trade-offs, Comparative Advantage, and the Market System

3. Where Prices Come From: The Interaction of Demand and Supply

4. Economic Efficiency, Government Price Setting, and Taxes

Appendix: Quantitative Demand and Supply Analysis

PART II: MARKETS IN ACTION: POLICY AND APPLICATIONS

5. Externalities, Environmental Policy, and Public Goods

6. Elasticity: The Responsiveness of Demand and Supply

7. The Economics of Health Care

PART III: FIRMS IN THE DOMESTIC AND INTERNATIONAL ECONOMIES

8. Firms, the Stock Market, and Corporate Governance

Appendix: Tools to Analyze Firms’ Financial Information

9. Comparative Advantage and the Gains from International Trade

PART IV: MICROECONOMIC FOUNDATIONS: CONSUMERS AND FIRMS

10. Consumer Choice and Behavioral Economics

Appendix: Using Indifference Curves and Budget Lines to Understand Consumer Behavior

11. Technology, Production, and Costs

Appendix: Using Isoquants and Isocost Lines to Understand Production and Cost

PART V: MARKET STRUCTURE AND FIRM STRATEGY

12. Firms in Perfectly Competitive Markets

13. Monopolistic Competition: The Competitive Model in a More Realistic Setting

14. Oligopoly: Firms in Less Competitive Markets

15. Monopoly and Antitrust Policy

16. Pricing Strategy

PART VI: LABOR MARKETS, PUBLIC CHOICE, AND THE DISTRIBUTION OF INCOME

17. The Markets for Labor and Other Factors of Production

18. Public Choice, Taxes, and the Distribution of Income

PART VII: MACROECONOMIC FOUNDATIONS AND LONG-RUN GROWTH

19. GDP: Measuring Total Production and Income

20. Unemployment and Inflation

21. Economic Growth, the Financial System, and Business Cycles

22. Long-Run Economic Growth: Sources and Policies

PART VIII: SHORT-RUN FLUCTUATIONS

23. Aggregate Expenditure and Output in the Short Run

Appendix: The Algebra of Macroeconomic Equilibrium

24. Aggregate Demand and Aggregate Supply Analysis

Appendix: Macroeconomic Schools of Thought

PART VIIII: MONETARY AND FISCAL POLICY

25. Money, Banks, and the Federal Reserve System

26. Monetary Policy

27. Fiscal Policy

Appendix: A Closer Look at the Multiplier

28. Inflation, Unemployment, and Federal Reserve Policy

PART X: THE INTERNATIONAL ECONOMY

29. Macroeconomics in an Open Economy

30. The International Financial System

Appendix: The Gold Standard and the Bretton Woods System

Supplemental Materials

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