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| Preface | |
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| Introduction: Markets and Prices | |
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| Preliminaries | |
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| The Themes of Microeconomics | |
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| What Is a Market? | |
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| Real versus Nominal Prices | |
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| Why Study Microeconomics? | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| The Basics of Supply and Demand | |
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| Supply and Demand | |
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| The Market Mechanism | |
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| Changes in Market Equilibrium | |
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| Elasticities of Supply and Demand | |
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| Short-Run versus Long-Run Elasticities | |
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| Understanding and Predicting the Effects of Changing Market Conditions | |
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| Effects of Government Intervention--Price Controls | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Producers, Consumers, and Competitive Markets | |
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| Consumer Behavior | |
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| Consumer Preferences | |
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| Budget Constraints | |
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| Consumer Choice | |
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| Revealed Preference | |
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| Marginal Utility and Consumer Choice | |
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| Cost-of-Living Indexes | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Individual and Market Demand | |
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| Individual Demand | |
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| Income and Substitution Effects | |
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| Market Demand | |
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| Consumer Surplus | |
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| Network Externalities | |
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| Empirical Estimation of Demand | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Appendix to Chapter 4: Demand Theory--A Mathematical Treatment | |
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| Choice Under Uncertainty | |
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| Describing Risk | |
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| Preferences Toward Risk | |
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| Reducing Risk | |
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| The Demand for Risky Assets | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Production | |
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| The Technology of Production | |
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| Isoquants | |
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| Production with One Variable Input (Labor) | |
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| Production with Two Variable Inputs | |
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| Returns to Scale | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| The Cost of Production | |
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| Measuring Cost: Which Costs Matter? | |
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| Cost in the Short Run | |
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| Cost in the Long Run | |
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| Long-Run versus Short-Run Cost Curves | |
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| Production with Two Outputs--Economies of Scope | |
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| Dynamic Changes in Costs--The Learning Curve | |
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| Estimating and Predicting Cost | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Appendix to Chapter 7: Production and Cost Theory--A Mathematical Treatment | |
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| Profit Maximization and Competitive Supply | |
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| Perfectly Competitive Markets | |
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| Profit Maximization | |
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| Marginal Revenue, Marginal Cost, and Profit Maximization | |
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| Choosing Output in the Short Run | |
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| The Competitive Firm's Short-Run Supply Curve | |
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| The Short-Run Market Supply Curve | |
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| Choosing Output in the Long Run | |
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| The Industry's Long-Run Supply Curve | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| The Analysis of Competitive Markets | |
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| Evaluating the Gains and Losses from Government Policies--Consumer and Producer Surplus | |
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| The Efficiency of a Competitive Market | |
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| Minimum Prices | |
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| Price Supports and Production Quotas | |
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| Import Quotas and Tariffs | |
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| The Impact of a Tax or Subsidy | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Market Structure and Competitive Strategy | |
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| Market Power: Monopoly and Monopsony | |
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| Monopoly | |
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| Monopoly Power | |
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| Sources of Monopoly Power | |
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| The Social Costs of Monopoly Power | |
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| Monopsony | |
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| Monopsony Power | |
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| Limiting Market Power: The Antitrust Laws | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Pricing with Market Power | |
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| Capturing Consumer Surplus | |
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| Price Discrimination | |
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| Intertemporal Price Discrimination and Peak-Load Pricing | |
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| The Two-Part Tariff | |
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| Bundling | |
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| Advertising | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Appendix to Chapter 11: Transfer Pricing in the Integrated Firm | |
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| Monopolistic Competition and Oligopoly | |
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| Monopolistic Competition | |
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| Oligopoly | |
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| Price Competition | |
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| Competition versus Collusion: The Prisoners' Dilemma | |
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| Implications of the Prisoners' Dilemma for Oligopolistic Pricing | |
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| Cartels | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Game Theory and Competitive Strategy | |
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| Gaming and Strategic Decisions | |
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| Dominant Strategies | |
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| The Nash Equilibrium Revisited | |
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| Repeated Games | |
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| Sequential Games | |
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| Threats, Commitments, and Credibility | |
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| Entry Deterrence | |
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| Bargaining Strategy | |
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| Auctions | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Markets for Factor Inputs | |
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| Competitive Factor Markets | |
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| Equilibrium in a Competitive Factor Market | |
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| Factor Markets with Monopsony Power | |
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| Factor Markets with Monopoly Power | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Investment, Time, and Capital Markets | |
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| Stocks versus Flows | |
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| Present Discounted Value | |
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| The Value of a Bond | |
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| The Net Present Value Criterion for Capital Investment Decisions | |
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| Adjustments for Risk | |
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| Investment Decisions by Consumers | |
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| Intertemporal Production Decisions--Depletable Resources | |
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| How Are Interest Rates Determined? | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Information, Market Failure, and the Role of Government | |
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| General Equilibrium and Economic Efficiency | |
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| General Equilibrium Analysis | |
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| Efficiency in Exchange | |
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| Equity and Efficiency | |
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| Efficiency in Production | |
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| The Gains from Free Trade | |
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| An Overview--The Efficiency of Competitive Markets | |
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| Why Markets Fail | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Markets with Asymmetric Information | |
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| Quality Uncertainty and the Market for Lemons | |
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| Market Signaling | |
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| Moral Hazard | |
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| The Principal-Agent Problem | |
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| Managerial Incentives in an Integrated Firm | |
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| Asymmetric Information in Labor Markets: Efficiency Wage Theory | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| Externalities and Public Goods | |
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| Externalities | |
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| Ways of Correcting Market Failure | |
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| Externalities and Property Rights | |
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| Common Property Resources | |
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| Public Goods | |
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| Private Preferences for Public Goods | |
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| Summary | |
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| Questions for Review | |
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| Exercises | |
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| The Basics of Regression | |
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| Glossary | |
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| Answers to Selected Exercises | |
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| Index | |
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| List of Examples | |
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| Markets for Prescription Drugs | |
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| The Price of Eggs and the Price of a College Education | |
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| The Minimum Wage | |
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| The Price of Eggs and the Price of a College Education Revisited | |
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| Wage Inequality in the United States | |
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| The Long-Run Behavior of Natural Resource Prices | |
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| The Market for Wheat | |
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| The Demand for Gasoline and Automobiles | |
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| The Weather in Brazil and the Price of Coffee in New York | |
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| Declining Demand and the Behavior of Copper Prices | |
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| Upheaval in the World Oil Market | |
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| Price Controls and Natural Gas Shortages | |
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| Designing New Automobiles | |
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| Designing New Automobiles (II) | |
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| Decision Making and Public Policy | |
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| A College Trust Fund | |
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| Revealed Preference for Recreation | |
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| Gasoline Rationing | |
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| The Bias in the CPI | |
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| Consumer Expenditures in the United States | |
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| The Effects of a Gasoline Tax | |
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| The Aggregate Demand for Wheat | |
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| The Demand for Housing | |
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| The Value of Clean Air | |
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| Network Externalities and the Demands for Computers and E-Mail | |
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| The Demand for Ready-to-Eat Cereal | |
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| Deterring Crime | |
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| Business Executives and the Choice of Risk | |
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| The Value of Title Insurance When Buying a House | |
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| The Value of Information in the Dairy Industry | |
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| Investing in the Stock Market | |
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| Malthus and the Food Crisis | |
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| Labor Productivity and the Standard of Living | |
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| A Production Function for Wheat | |
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| Returns to Scale in the Carpet Industry | |
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| Choosing the Location for a New Law School Building | |
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| Sunk, Fixed, and Variable Costs: Computers, Software, and Pizzas | |
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| The Short-Run Cost of Aluminum Smelting | |
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| The Effect of Effluent Fees on Input Choices | |
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| Economies of Scope in the Trucking Industry | |
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| The Learning Curve in Practice | |
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| Cost Functions for Electric Power | |
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| A Cost Function for the Savings and Loan Industry | |
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| The Short-Run Output Decision of an Aluminum Smelting Plant | |
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| Some Cost Considerations for Managers | |
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| The Short-Run Production of Petroleum Products | |
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| The Short-Run World Supply of Copper | |
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| The Long-Run Supply of Housing | |
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| Price Controls and Natural Gas Shortages | |
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| The Market for Human Kidneys | |
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| Airline Regulation | |
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| Supporting the Price of Wheat | |
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| The Sugar Quota | |
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| A Tax on Gasoline | |
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| Astra-Merck Prices Prilosec | |
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| Markup Pricing: Supermarkets to Designer Jeans | |
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| The Pricing of Prerecorded Videocassettes | |
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| Monopsony Power in U.S. Manufacturing | |
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| A Phone Call About Prices | |
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| The United States versus Microsoft | |
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| The Economics of Coupons and Rebates | |
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| Airline Fares | |
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| How to Price a Best-Selling Novel | |
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| Polaroid Cameras | |
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| Pricing Cellular Phone Service | |
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| The Complete Dinner versus a la Carte: A Restaurant's Pricing Problem | |
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| Advertising in Practice | |
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| Monopolistic Competition in the Markets for Colas and Coffee | |
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| A Pricing Problem for Procter and Gamble | |
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| Procter and Gamble in a Prisoners' Dilemma | |
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| Price Leadership and Price Rigidity in Commercial Banking | |
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| The Cartelization of Intercollegiate Athletics | |
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| The Milk Cartel | |
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| Acquiring a Company | |
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| Oligopolistic Cooperation in the Water Meter Industry | |
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| Competition and Collusion in the Airline Industry | |
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| Wal-Mart Stores' Preemptive Investment Strategy | |
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| DuPont Deters Entry in the Titanium Dioxide Industry | |
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| Diaper Wars | |
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| Internet Auctions | |
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| The Demand for Jet Fuel | |
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| Labor Supply for One- and Two-Earner Households | |
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| Pay in the Military | |
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| Monopsony Power in the Market for Baseball Players | |
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| Teenage Labor Markets and the Minimum Wage | |
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| The Decline of Private-Sector Unionism | |
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| Wage Inequality--Have Computers Changed the Labor Market? | |
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| The Value of Lost Earnings | |
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| The Yields on Corporate Bonds | |
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| Capital Investment in the Disposable Diaper Industry | |
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| Choosing an Air Conditioner and a New Car | |
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| How Depletable Are Depletable Resources? | |
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| The Interdependence of International Markets | |
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| The Effects of Automobile Import Quotas | |
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| The Costs and Benefits of Special Protection | |
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| Lemons in Major League Baseball | |
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| Working into the Night | |
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| Reducing Moral Hazard--Warranties of Animal Health | |
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| Crisis in the Savings and Loan Industry | |
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| Managers of Nonprofit Hospitals as Agents | |
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| Efficiency Wages at Ford Motor Company | |
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| The Costs and Benefits of Reduced Sulfur Dioxide Emissions | |
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| Emissions Trading and Clean Air | |
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| Regulating Municipal Solid Wastes | |
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| The Coase Theorem at Work | |
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| Crawfish Fishing in Louisiana | |
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| The Demand for Clear Air | |
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| The Demand for Coal | |