Front Matter Introduction
ABOUT THE AUTHORS
PREFACE: TO THE INSTRUCTOR
What's New in the Third Edition?
What's in the Chapters?
Alternative Paths through the Book
Media and Supplements
Acknowledgements
Chapter Introduction
Big Idea One: Incentives Matter
Big Idea Two: Good Institutions Align Self-Interest with the Social Interest
Big Idea Three: Trade-offs Are Everywhere
Big Idea Four: Thinking on the Margin
Big Idea Five: The Power of Trade
Big Idea Six: The Importance of Wealth and Economic Growth
Big Idea Seven: Institutions Matter
Big Idea Eight: Economic Booms and Busts Cannot Be Avoided but Can Be Moderated
Big Idea Nine: Prices Rise When the Government Prints Too Much Money
Big Idea Ten: Central Banking Is a Hard Job
The Biggest Idea of All: Economics Is Fun
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Trade and Preferences
Specialization, Productivity, and the Division of Knowledge
Comparative Advantage
Trade and Globalization
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
The Demand Curve for Oil
Consumer Surplus
What Shifts the Demand Curve?
The Supply Curve for Oil
Producer Surplus
What Shifts the Supply Curve?
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Equilibrium and the Adjustment Process
A Free Market Maximizes Producer Plus Consumer Surplus (the Gains from Trade)
Does the Model Work? Evidence from the Laboratory
Shifting Demand and Supply Curves
Terminology: Demand Compared with Quantity Demanded and Supply Compared with Quantity Supplied
Understanding the Price of Oil
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
The Elasticity of Demand
Applications of Demand Elasticity
The Elasticity of Supply
Applications of Supply Elasticity
Using Elasticities for Quick Predictions (Optional)
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
CHAPTER 5 APPENDIX 1 Other Types of Elasticities
The Cross-Price Elasticity of Demand
The Income Elasticity of Demand
CHAPTER 5 APPENDIX 2 Using Excel to Calculate Elasticities
Chapter Introduction
Commodity Taxes
Who Ultimately Pays the Tax Does Not Depend on Who Writes the Check
Who Ultimately Pays the Tax Depends on the Relative Elasticities of Supply and Demand
A Commodity Tax Raises Revenue and Creates a Deadweight Loss (Reduces the Gains from Trade)
Subsidies
Takeaway
CHAPTER REVIEW
Chapter Introduction
Markets Link the World
Markets Link to One Another
Solving the Great Economic Problem
A Price Is a Signal Wrapped Up in an Incentive
Speculation
Signal Watching
Prediction Markets
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Price Ceilings
Rent Controls (Optional Section)
Arguments for Price Ceilings
Universal Price Controls
Price Floors
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Analyzing Trade with Supply and Demand
The Costs of Protectionism
Arguments Against International Trade
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
External Costs, External Benefits, and Efficiency
Private Solutions to Externality Problems
Government Solutions to Externality Problems
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
What Price to Set?
What Quantity to Produce?
Profits and the Average Cost Curve
Entry, Exit, and Shutdown Decisions
Entry, Exit, and Industry Supply Curves
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
CHAPTER 11 APPENDIX Using Excel to Graph Cost Curves
Chapter Introduction
Invisible Hand Property 1: The Minimization of Total Industry Costs of Production
Invisible Hand Property 2: The Balance of Industries
Creative Destruction
The Invisible Hand Works with Competitive Markets
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Market Power
How a Firm Uses Market Power to Maximize Profit
The Costs of Monopoly: Deadweight Loss
The Costs of Monopoly: Corruption and Inefficiency
The Benefits of Monopoly: Incentives for Research and Development
Economies of Scale and the Regulation of Monopoly
Other Sources of Market Power
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Price Discrimination
Price Discrimination Is Common
Is Price Discrimination Bad?
Tying and Bundling
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
CHAPTER 14 APPENDIX Solving Price Discrimination Problems with Excel (Advanced Section)
Chapter Introduction
Cartels
The Prisoner's Dilemma
Oligopolies
When Are Cartels and Oligopolies Most Successful?
Government Policy toward Cartels and Oligopolies
Business Strategy and Changing the Game
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
CHAPTER 15 APPENDIX Nash Equilibrium
CHAPTER 15 APPENDIX QUESTIONS
Chapter Introduction
Network Goods Are Usually Sold by Monopolies or Oligopolies
The "Best" Product May Not Always Win
Competition Is "For the Market" Instead of "In the Market"
Antitrust and Network Goods
Music Is a Network Good
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Sources of Product Differentiation
The Monopolistic Competition Model
The Economics of Advertising
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
The Demand for Labor and the Marginal Product of Labor
Supply of Labor
Labor Market Issues
How Bad Is Labor Market Discrimination, or Can Lakisha Catch a Break?
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Four Types of Goods
Private Goods and Public Goods
Club Goods
Common Resources and the Tragedy of the Commons
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
CHAPTER 19 APPENDIX The Tragedy of the Commons: How Fast?
Chapter Introduction
Voters and the Incentive to Be Ignorant
Special Interests and the Incentive to Be Informed
A Formula for Political Success: Diffuse Costs, Concentrate Benefits
Voter Myopia and Political Business Cycles
Two Cheers for Democracy
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
The Case for Exporting Pollution and Importing Kidneys
Exploitation
Meddlesome Preferences
Fair and Equal Treatment
Cultural Goods and Paternalism
Poverty, Inequality, and the Distribution of Income
Who Counts? Immigration
Economic Ethics
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Lesson One: You Get What You Pay For
Lesson Two: Tie Pay to Performance to Reduce Risk
Lesson Three: Money Isn't Everything
Lesson Four: Nudges Can Work
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Passive vs. Active Investing
Why Is It Hard to Beat the Market?
How to Really Pick Stocks, Seriously
Other Benefits and Costs of Stock Markets
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Moral Hazard
Adverse Selection
Signaling as a Response to Asymmetric Information
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
How to Compare Apples and Oranges
The Demand Curve
The Budget Constraint
Preferences and Indifference Curves
Optimization and Consumer Choices
The Income and Substitution Effects
Applications of Income and Substitution Effects
Takeaway
KEY CONCEPTS
CHAPTER REVIEW
Chapter Introduction
Graphs Express Ideas
Data Graphs
Graphing Three Variables
Cause and Effect
Appendix A Questions
Chapter Introduction
Check Yourself Solutions for Chapter 2 through Chapter 4
Check Yourself Solutions for Chapter 5 through Chapter 8
Check Yourself Solutions for Chapter 9 through Chapter 12
Check Yourself Solutions for Chapter 13 through Chapter 16
Check Yourself Solutions for Chapter 17 through Chapter 20
Check Yourself Solutions for Chapter 22 through Chapter 25