MICROECONOMICS
ABOUT THE AUTHORS
PREFACE
The Ordinary Business of Life
1.1 The Invisible Hand
1.2 My Benefit, Your Cost
1.3 Good Times, Bad Times
1.4 Onward and Upward
1.5 An Engine for Discovery
1.6 KEY TERMS
First Principles
1.1 Principles That Underlie Individual Choice: The Core of Economics
1.2 Interaction: How Economies Work
1.3 Economy-Wide Interactions
1.4 SUMMARY
1.5 KEY TERMS
1.6 PROBLEMS
Economic Models: Trade-offs and Trade
2.1 Models in Economics: Some Important Examples
2.2 Using Models
2.3 SUMMARY
2.4 KEY TERMS
2.5 PROBLEMS
Supply and Demand
3.1 Supply and Demand: A Model of a Competitive Market
3.2 The Demand Curve
3.3 The Supply Curve
3.4 Supply, Demand, and Equilibrium
3.5 Changes in Supply and Demand
3.6 Competitive Markets-And Others
3.7 SUMMARY
3.8 KEY TERMS
3.9 PROBLEMS
Consumer and Producer Surplus
4.1 Consumer Surplus and the Demand Curve
4.2 Producer Surplus and the Supply Curve
4.3 Consumer Surplus, Producer Surplus, and the Gains from Trade
4.4 A Market Economy
4.5 SUMMARY
4.6 KEY TERMS
4.7 PROBLEMS
Price Controls and Quotas: Meddling with Markets
5.1 Why Governments Control Prices
5.2 Price Ceilings
5.3 Price Floors
5.4 Controlling Quantities
5.5 SUMMARY
5.6 KEY TERMS
5.7 PROBLEMS
Elasticity
6.1 Defining and Measuring Elasticity
6.2 Interpreting the Price Elasticity of Demand
6.3 Other Demand Elasticities
6.4 The Price Elasticity of Supply
6.5 An Elasticity Menagerie
6.6 SUMMARY
6.7 KEY TERMS
6.8 PROBLEMS
Taxes
7.1 The Economics of Taxes: A Preliminary View
7.2 The Benefits and Costs of Taxation
7.3 Tax Fairness and Tax Efficiency
7.4 Understanding the Tax System
7.5 SUMMARY
7.6 KEY TERMS
7.7 PROBLEMS
International Trade
8.1 Comparative Advantage and International Trade
8.2 Supply, Demand, and International Trade
8.3 The Effects of Trade Protection
8.4 The Political Economy of Trade Protection
8.5 SUMMARY
8.6 KEY TERMS
8.7 PROBLEMS
Decision Making by Individuals and Firms
9.1 Costs, Benefits, and Profits
9.2 Making "How Much" Decisions: The Role of Marginal Analysis
9.3 Sunk Costs
9.4 Behavioural Economics
9.5 SUMMARY
9.6 KEY TERMS
9.7 PROBLEMS
The Rational Consumer
10.1 Utility: Getting Satisfaction
10.2 Budgets and Optimal Consumption
10.3 Spending the Marginal Dollar
10.4 From Utility to the Demand Curve
10.5 SUMMARY
10.6 KEY TERMS
10.7 PROBLEMS
Behind the Supply Curve: Inputs and Costs
11.1 The Production Function
11.2 Two Key Concepts: Marginal Cost and Average Cost
11.3 Short-Run versus Long-Run Costs
11.4 SUMMARY
11.5 KEY TERMS
11.6 PROBLEMS
Perfect Competition and the Supply Curve
12.1 Perfect Competition
12.2 Production and Profits
12.3 The Industry Supply Curve
12.4 SUMMARY
12.5 KEY TERMS
12.6 PROBLEMS
Monopoly
13.1 Types of Market Structure
13.2 The Meaning of Monopoly
13.3 How a Monopolist Maximizes Profit
13.4 Monopoly and Public Policy
13.5 Price Discrimination
13.6 SUMMARY
13.7 KEY TERMS
13.8 PROBLEMS
Oligopoly
14.1 The Prevalence of Oligopoly
14.2 Understanding Oligopoly
14.3 Games Oligopolists Play
14.4 Oligopoly in Practice
14.5 SUMMARY
14.6 KEY TERMS
14.7 PROBLEMS
Monopolistic Competition and Product Differentiation
15.1 The Meaning of Monopolistic Competition
15.2 Product Differentiation
15.3 Understanding Monopolistic Competition
15.4 Monopolistic Competition versus Perfect Competition
15.5 Controversies About Product Differentiation
15.6 SUMMARY
15.7 KEY TERMS
15.8 PROBLEMS
Externalities
16.1 The Economics of Pollution
16.2 Policies Toward Pollution
16.3 Positive Externalities
16.4 Network Externalities
16.5 SUMMARY
16.6 KEY TERMS
16.7 PROBLEMS
Public Goods and Common Resources
17.1 Private Goods-And Others
17.2 Public Goods
17.3 Common Resources
17.4 Artificially Scarce Goods
17.5 SUMMARY
17.6 KEY TERMS
17.7 PROBLEMS
The Economics of the Welfare State
18.1 Poverty, Inequality, and Public Policy
18.2 The Welfare State in Canada
18.3 The Economics of Health Care
18.4 The Debate over the Welfare State
18.5 SUMMARY
18.6 KEY TERMS
18.7 PROBLEMS
Factor Markets and the Distribution of Income
19.1 The Economy's Factors of Production
19.2 Marginal Productivity and Factor Demand
19.3 Is the Marginal Productivity Theory of Income Distribution Really True?
19.4 The Supply of Labour
19.5 SUMMARY
19.6 KEY TERMS
19.7 PROBLEMS
Uncertainty, Risk, and Private Information
20.1 The Economics of Risk Aversion
20.2 Buying, Selling, and Reducing Risk
20.3 Private Information: What You Don't Know Can Hurt You
20.4 SUMMARY
20.5 KEY TERMS
20.6 PROBLEMS
Graphs in Economics
Graphs, Variables, and Economic Models
How Graphs Work
A Key Concept: The Slope of a Curve
Calculating the Area Below or Above a Curve
Graphs That Depict Numerical Information
PROBLEMS
The Algebra of Demand, Supply, and Equilibrium
The Demand Curve
The Supply Curve
Market Equilibrium
PROBLEMS
The Algebra of Elasticity
Price Elasticity of Demand
Income Elasticity of Demand
Cross-Price Elasticity of Demand
Elasticity of Supply
PROBLEMS
Consumer Preferences and Consumer Choice
Mapping the Utility Function
Indifference Curves and Consumer Choice
Using Indifference Curves: Substitutes and Complements
Prices, Income, and Demand
PROBLEMS
Inverse Relationships Between Productivity and Cost
Deriving the Inverse Relationships
PROBLEMS
Indifference Curve Analysis of Labour Supply
The Time Allocation Budget Line
The Effect of a Higher Wage Rate
Indifference Curve Analysis
PROBLEMS