Principles of Microeconomics

ISBN-10: 0131994859
ISBN-13: 9780131994850
Edition: 8th 2007 (Revised)
List price: $132.67
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Description: Case and Fair is the trusted Microeconomics text that teaches students through stories, graphs, and equations...and now, a newnbsp;emphasis on excellence in assessment. nbsp; These two highly-respected economists and educators have revised this  More...

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Book details

List price: $132.67
Edition: 8th
Copyright year: 2007
Publisher: Prentice Hall PTR
Binding: Paperback
Pages: 528
Size: 8.25" wide x 10.50" long x 0.50" tall
Weight: 2.398
Language: English

Case and Fair is the trusted Microeconomics text that teaches students through stories, graphs, and equations...and now, a newnbsp;emphasis on excellence in assessment. nbsp; These two highly-respected economists and educators have revised this best-selling Microeconomics book to include more current topics and events while maintaining its hallmark feature of teaching economics through stories, graphs, and equations; relevant to students with various learning styles (verbal, visual, and numerical).

Ray C. Fair is Professor of Economics, Yale University.

Preface
Introduction to Economics
The Scope and Method of Economics
Why Study Economics?
To Learn a Way of Thinking
To Understand Society
News Analysis: Economics and Global Affairs in 2005
To Understand Global Affairs
To Be an Informed Voter
The Scope of Economics
Microeconomics and Macroeconomics
The Diverse Fields of Economics
Further Exploration: The Fields of Economics
The Method of Economics
Theories and Models
Economic Policy
An Invitation
Summary
Review Terms and Concepts
Problem Set
How to Read and Understand Graphs
The Economic Problem: Scarcity and Choice
Scarcity, Choice, and Opportunity Cost
Scarcity and Choice in a One-Person Economy
News Analysis: Opportunity Costs and Internships
Scarcity and Choice in an Economy of Two or More
The Production Possibility Frontier
Comparative Advantage and the Gains from Trade
The Economic Problem
Economic Systems
Command Economies
Laissez-Faire Economies: The Free Market
Mixed Systems, Markets, and Governments
Looking Ahead
Summary
Review Terms and Concepts
Problem Set
Demand, Supply, and Market Equilibrium
Firms and Households: The Basic Decision-Making Units
Input Markets and Output Markets: The Circular Flow
Demand in Product/Output Markets
Changes in Quantity Demanded Versus Changes in Demand
Price and Quantity Demanded: The Law of Demand
Other Determinants of Household Demand
Shift of Demand versus Movement Along a Demand Curve
From Household Demand to Market Demand
Supply in Product/Output Markets
Price and Quantity Supplied: The Law of Supply
Other Determinants of Supply
Shift of Supply versus Movement along a Supply Curve
From Individual Supply to Market Supply
Market Equilibrium
Excess Demand
Excess Supply
Changes in Equilibrium
Demand and Supply in Product Markets: A Review
Looking Ahead: Markets and the Allocation of Resources
News Analysis: Mad Cow Disease Cuts Demand for Cattle in 2005
Summary
Review Terms and Concepts
Problem Set
Demand and Supply Applications
The Price System: Rationing and Allocating Resources
Price Rationing
Constraints on the Market and Alternative Rationing Mechanisms
News Analysis: Hurricane Katrina and Gasoline Prices in 2005
Prices and the Allocation of Resources
Price Floors
Supply and Demand Analysis: An Oil Import Fee
Supply and Demand and Market Efficiency
Consumer Surplus
Producer Surplus
Competitive Markets Maximize the Sum of Producer and Consumer Surplus
Potential Causes of Deadweight Loss from Under- and Overproduction
Further Exploration: The Drug Wars: A Matter of Supply and Demand
Looking Ahead
Summary
Review Terms and Concepts
Problem Set
Elasticity
Price Elasticity of Demand
Slope and Elasticity
Types of Elasticity
News Analysis: Elasticity of Supply and House Prices
Calculating Elasticities
Calculating Percentage Changes
Elasticity Is a Ratio of Percentages
The Midpoint Formula
Elasticity Changes along a Straight-Line Demand Curve
Elasticity and Total Revenue
The Determinants of Demand Elasticity
Availability of Substitutes
The Importance of Being Unimportant
Further Exploration: London Newspapers and New York Restaurants Learn about Elasticity
The Time Dimension
Other Important Elasticities
Income Elasticity of Demand
Cross-Price Elasticity of Demand
Elasticity of Supply
Looking Ahead
Summary
Review Terms and Concepts
Problem Set
Point Elasticity (Optional)
Foundations of Microeconomics: Consumers and Firms
Household Behavior and Consumer Choice
Household Choice in Output Markets
The Determinants of Household Demand
The Budget Constraint
Further Exploration: Opportunity Costs-Then and Now
The Equation of the Budget Constraint
The Basis of Choice: Utility
Diminishing Marginal Utility
Allocating Income to Maximize Utility
The Utility-Maximizing Rule
Diminishing Marginal Utility and Downward-Sloping Demand
Income and Substitution Effects
The Income Effect
News Analysis: Marginal Utility and the Capacity to Consume
The Substitution Effect
Consumer Surplus
Household Choice in Input Markets
The Labor Supply Decision
The Price of Leisure
Income and Substitution Effects of a Wage Change
Saving and Borrowing: Present Versus Future Consumption
A Review: Households in Output and Input Markets
Summary
Review Terms and Concepts
Problem Set
Indifference Curves
The Production Process: The Behavior of Profit-Maximizing Firms
The Behavior of Profit-Maximizing Firms
Profits and Economic Costs
News Analysis: An Idea, a Firm, and Profits in 2005
Short-Run versus Long-Run Decisions
The Bases of Decisions: Market Price of Outputs, Available Technology, and Input Prices
The Production Process
Production Functions: Total Product, Marginal Product, and Average Product
Production Functions with Two Variable Factors of Production
Choice of Technology
News Analysis: Increasing Substitution of Capital for Labor Raises Labor Productivity
Looking Ahead: Cost and Supply
Summary
Review Terms and Concepts
Problem Set
Isoquants and Iscosts
Short-Run Costs and Output Decisions
Costs in the Short Run
Fixed Costs
Variable Costs
Total Costs
Short-Run Costs: A Review
Output Decisions: Revenues, Costs, and Profit Maximization
Total Revenue (TR) and Marginal Revenue (MR)
Comparing Costs and Revenues to Maximize Profit
Further Exploration: Case Study in Marginal Analysis: An Ice Cream Parlor
The Short-Run Supply Curve
Looking Ahead
Summary
Review Terms and Concepts
Problem Set
Long-Run Costs and Output Decisions
Short-Run Conditions and Long-Run Directions
Maximizing Profits
Minimizing Losses
The Short-Run Industry Supply Curve
Long-Run Directions: A Review
Long-Run Costs: Economies and Diseconomies of Scale
Increasing Returns to Scale
Further Exploration: Why Small Farmers Have Trouble Competing: Economies of Scale in Agriculture
Constant Returns to Scale
News Analysis: Economies of Scale in Banking, 2005
Decreasing Returns to Scale
Long-Run Adjustments to Short-Run Conditions
Short-Run Profits: Expansion to Equilibrium
Short-Run Losses: Contraction to Equilibrium
The Long-Run Adjustment Mechanism: Investment Flows Toward Profit Opportunities
Further Exploration The Long-Run Average Cost Curve: Flat or U-Shaped
Output Markets: A Final Word
Summary
Review Terms and Concepts
Problem Set
External Economies and Diseconomies and the Long-Run Industry Supply Curve
Input Demand: The Labor and Land Markets
Input Markets: Basic Concepts
Demand for Inputs: A Derived Demand
Inputs: Complementary and Substitutable
Diminishing Returns
Marginal Revenue Product
Labor Markets
A Firm Using Only One Variable Factor of Production: Labor
News Analysis: Baseball Salaries and Marginal Revenue Product in 2005
A Firm Employing Two Variable Factors of Production in the Short and Long Run
Many Labor Markets
Land Markets
Rent and the Value of Output Produced on Land
The Firm's Profit-Maximization Condition in Input Markets
Input Demand Curves
Shifts in Factor Demand Curves
Resource Allocation and the Mix of Output in Competitive Markets
The Distribution of Income
Looking Ahead
Summary
Review Terms and Concepts
Problem Set
Input Demand: The Capital Market and the Investment Decision
Capital, Investment, and Depreciation
Capital
Investment and Depreciation
The Capital Market
Capital Income: Interest and Profits
Financial Markets in Action
Capital Accumulation and Allocation
News Analysis: Putting Their Money Where the Future Is in 2005
The Demand for New Capital and the Investment Decision
Forming Expectations
Comparing Costs and Expected Return
A Final Word on Capital
Summary
Review Terms and Concepts
Problem Set
Calculating Present Value
General Equilibrium and the Efficiency of Perfect Competition
General Equilibrium Analysis
An Early Technological Advance: The Electronic Calculator
News Analysis: The Dot-Com Bust and the Labor Market: 2003
Market Adjustment to Changes in Demand
Formal Proof of a General Competitive Equilibrium
Allocative Efficiency and Competitive Equilibrium
Pareto Efficiency
The Efficiency of Perfect Competition
Perfect Competition versus Real Markets
The Sources of Market Failure
Imperfect Markets
Public Goods
Externalities
Imperfect Information
Evaluating the Market Mechanism
Summary
Review Terms and Concepts
Problem Set
Market Imperfections and the Role of Government
Monopoly and Antitrust Policy
Imperfect Competition and Market Power: Core Concepts
Defining Industry Boundaries
Barriers to Entry
Price: The Fourth Decision Variable
News Analysis: The Drug Wars in 2005
Price and Output Decisions in Pure Monopoly Markets
Demand in Monopoly Markets
Perfect Competition and Monopoly Compared
Collusion and Monopoly Compared
The Social Costs of Monopoly
Inefficiency and Consumer Loss
Rent-Seeking Behavior
Price Discrimination
Examples of Price Discrimination
Remedies for Monopoly: Antitrust Policy
The Development of Antitrust Law: Historical Background
Landmark Antitrust Legislation
The Enforcement of Antitrust Law
Initiating Antitrust Actions
Sanctions and Remedies
News Analysis: Price-Fixing Cases in 2005
A Natural Monopoly
Do Natural Monopolies Still Exist?
News Analysis: From a Natural Monopoly to Near-Perfect Competition
Imperfect Markets: A Review and A Look Ahead
Summary
Review Terms and Concepts
Problem Set
Monopolistic Competition and Oligopoly
Monopolistic Competition
Product Differentiation, Advertising, and Social Welfare
Price and Output Determination in Monopolistic Competition
Economic Efficiency and Resource Allocation
Oligopoly
Oligopoly Models
Further Exploration: Regulation of Mergers by the Department of Justice and the Federal Trade Commission
Game Theory
Repeated Games
A Game with Many Players: Collective Action Can Be Blocked by a Prisoners' Dilemma
Contestable Markets
Oligopoly and Economic Performance
Industrial Concentration and Technological Change
The Role of Government
Regulation of Mergers
News Analysis: Footwear Giant Adidas Buys Reebok in 2005
A Proper Role?
Summary
Review Terms and Concepts
Problem Set
Externalities, Public Goods, Imperfect Information, and Social Choice
Externalities and Environmental Economics
Marginal Social Cost and Marginal-Cost Pricing
Private Choices and External Effects
Internalizing Externalities
News Analysis: Externalities Are All Around Us
Further Exploration: Global Warming: A Global Externality?
Public (Social) Goods
The Characteristics of Public Goods
Income Distribution As a Public Good?
Public Provision of Public Goods
Optimal Provision of Public Goods
Local Provision of Public Goods: Tiebout Hypothesis
Mixed Goods
Imperfect Information
Adverse Selection: Asymmetric Information
Moral Hazard
Market Solutions
Government Solutions
Social Choice
The Voting Paradox
Government Inefficiency: Theory of Public Choice
Rent-Seeking Revisited
Government and the Market
Summary
Review Terms and Concepts
Problem Set
Income Distribution and Poverty
The Utility Possibilities Frontier
The Sources of Household Income
Wages and Salaries
Income from Property
Income from the Government: Transfer Payments
The Distribution of Income
Income Inequality in the United States
Poverty
The Distribution of Wealth
News Analysis: Hunger in the United States in 2003
The Redistribution Debate
Arguments against Redistribution
Arguments in Favor of Redistribution
Redistribution Programs and Policies
Financing Redistribution Programs: Taxes
Expenditure Programs
News Analysis: The Lack of Health Care Insurance
How Effective Are Antipoverty Programs?
Government or the Market? A Review
Summary
Review Terms and Concepts
Problem Set
Public Finance: The Economics of Taxation
The Economics of Taxation
Taxes: Basic Concepts
Tax Equity
What is the "Best" Tax Base?
The Gift and Estate Tax
Tax Incidence: Who Pays?
The Incidence of Payroll Taxes
The Incidence of Corporate Profits Taxes
The Overall Incidence of Taxes in the United States: Empirical Evidence
Excess Burdens and the Principle of Neutrality
How Do Excess Burdens Arise?
The Principle of Second Best
News Analysis: President Bush's Advisory Panel on Federal Tax Reform
Measuring Excess Burdens
Excess Burdens and the Degree of Distortion
Summary
Review Terms and Concepts
Problem Set
The World Economy
International Trade, Comparative Advantage, and Protectionism
Trade Surpluses and Deficits
The Economic Basis for Trade: Comparative Advantage
Absolute Advantage versus Comparative Advantage
Terms of Trade
Exchange Rates
The Sources of Comparative Advantage
The Heckscher-Ohlin Theorem
Other Explanations for Observed Trade Flows
Trade Barriers: Tariffs, Export Subsidies, and Quotas
News Analysis: New Trade Agreement with Central America and the Dominican Republic-2005
Free Trade or Protection?
The Case for Free Trade
The Case for Protection
Further Exploration: A Petition
An Economic Consensus
Summary
Review Terms and Concepts
Problem Set
Globalization
The Global Circular Flow
A Brief History of Economic Globalization
The Benefits and Costs of Globalization
The Free-Trade Debate Revisited
Trade, Growth, and Poverty
The Globalization of Labor Markets: The Economics of Immigration and Outsourcing
Capital Mobility
News Analysis: Outsourcing Is Not Just Customer Service Reps in India
Public Policy and Globalization
Global Externalities and Public Goods
Nongovernmental Organizations and International Economics: The Washington Consensus
Globalization, Capitalism, and Democracy
A Final Word
Summary
Review Terms and Concepts
Problem Set
Economic Growth in Developing and Transitional Economies
Life in the Developing Nations: Population and Poverty
Economic Development: Sources and Strategies
The Sources of Economic Development
Strategies for Economic Development
News Analysis: Trade and Development in Africa-2003
Growth versus Development: The Policy Cycle
Issues in Economic Development
Population Growth
Developing-Country Debt Burdens
Economies in Transition
Political Systems and Economic Systems: Socialism, Capitalism, and Communism
Central Planning versus The Market
The End of the Soviet Union
The Transition to a Market Economy
Six Basic Requirements for Successful Transition
News Analysis: Russia's Economy in 2005
Summary
Review Terms and Concepts
Problem Set
Glossary
Solutions to Even-Numbered Problems
Index
Photo Credits

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