Economics, 14th Edition, Global Edition

get link Cover Title Page Copyright Page About the Author Brief Contents Detailed Contents Part 1: Introduction Chapter 1: What Is Economics? Definition of Economics Two Big Economic Questions What, How, and for Whom? Do Choices Made in the Pursuit of Selfinterest Also Promote the Social Interest? The Invisible Hand The Protest Against Market Capitalism The Economic Way of Thinking A Choice Is a Tradeoff Making a Rational Choice Benefit: What You Gain Cost: What You Must Give Up How Much? Choosing at the Margin Choices Respond to Incentives Economics as Social Science and Policy Tool Economist as Social Scientist Economist as Policy Adviser Economists in the Economy Jobs for an Economics Major Will Jobs for Economics Majors Grow? Earnings of Economics Majors Skills Needed for Economics Jobs A Diversity Challenge in the Economics Profession Summary Key Points Key Terms Graphing Data Graphing Economic Data Scatter Diagrams Graphs Used in Economic Models Variables That Move in the Same Direction Variables That Move in Opposite Directions Variables That Have a Maximum or a Minimum Variables That Are Unrelated The Slope of a Relationship The Slope of a Straight Line The Slope of a Curved Line Graphing Relationships Among More Than Two Variables Ceteris Paribus When Other Things Change Mathematical Note Equations of Straight Lines A Linear Equation Slope of Line Position of Line Positive Relationships Negative Relationships Example Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 2: The Economic Problem Production Possibilities and Opportunity Cost Production Possibilities Frontier Production Efficiency Tradeoff Along the PPF Opportunity Cost The Opportunity Cost of Kale Using Resources Efficiently The PPF and Marginal Cost Preferences and Marginal Benefit Allocative Efficiency Gains from Trade Comparative Advantage and Absolute Advantage Achieving the Gains from Trade The Liz–joe Economy and Its PPF Economic Growth The Cost of Economic Growth A Nation’s Economic Growth Changes in What We Produce Economic Coordination Firms Markets Property Rights Money Circular Flows Through Markets Coordinating Decisions Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Part 2: How Markets Work Chapter 3: Demand and Supply Markets and Prices Demand The Law of Demand Demand Curve and Demand Schedule A Change in Demand A Change in the Quantity Demanded Versus a Change in Demand Supply The Law of Supply Supply Curve and Supply Schedule A Change in Supply A Change in the Quantity Supplied Versus a Change in Supply Market Equilibrium Price as a Regulator Price Adjustments Predicting Changes in Price and Quantity An Increase in Demand A Decrease in Demand The Markets for Chocolate and Cocoa An Increase in Supply A Decrease in Supply The Market for Vanilla Bean Changes in Both Demand and Supply Mathematical Note Demand, Supply, and Equilibrium Demand Curve Supply Curve Market Equilibrium An Example Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 4: Elasticity Price Elasticity of Demand Calculating Price Elasticity of Demand Inelastic and Elastic Demand The Factors That Influence the Elasticity of Demand Elasticity Along a Linear Demand Curve Total Revenue and Elasticity The Elasticity of Demand for Peanut Butter Your Expenditure and Your Elasticity More Elasticities of Demand Income Elasticity of Demand Cross Elasticity of Demand More Peanut Butter Demand Elasticities Elasticity of Supply Calculating the Elasticity of Supply The Factors That Influence the Elasticity of Supply Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 5: Efficiency and Equity Resource Allocation Methods Market Price Command Majority Rule Contest First-come, First-served Lottery Personal Characteristics Force Benefit, Cost, and Surplus Demand, Willingness to Pay, and Value Individual Demand and Market Demand Consumer Surplus Supply and Marginal Cost Supply, Cost, and Minimum Supply-price Individual Supply and Market Supply Producer Surplus Is the Competitive Market Efficient? Efficiency of Competitive Equilibrium Market Failure Sources of Market Failure Alternatives to the Market Is the Competitive Market Fair? It’s Not Fair if the Result Isn't Fair It's Not Fair if the Rules Aren't Fair Case Study: a Generator Shortage in a Natural Disaster Price Gouging Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 6: Government Actions in Markets A Housing Market with a Rent Ceiling A Housing Shortage Increased Search Activity An Illicit Market Inefficiency of a Rent Ceiling Are Rent Ceilings Fair? A Labor Market with a Minimum Wage Minimum Wage Brings Unemployment Is the Minimum Wage Fair? Inefficiency of a Minimum Wage Does the Minimum Wage Cause Unemployment? Taxes Tax Incidence Equivalence of a Tax on Buyers and Sellers Taxes and Efficiency Tax Influence of the Elasticity of Demand Tax Influence of the Elasticity of Supply Taxes and Fairness The Big Tradeoff Production Quotas and Subsidies Production Quotas Subsidies Markets for Illegal Goods A Free Market for a Drug A Market for an Illegal Drug Legalizing and Taxing Drugs Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 7: Global Markets In Action How Global Markets Work International Trade Today What Drives International Trade? Why the United States Imports T-shirts Why the United States Exports Airplanes Winners, Losers, and the Net Gain from Trade Gains and Losses from Imports Gains and Losses from Exports Gains for All International Trade Restrictions Tariffs Import Quotas The U.S.–Canada Lumber Dispute Other Import Barriers Export Subsidies The Case Against Protection Helps an Infant Industry Grow Counteracts Dumping Saves Domestic Jobs Allows Us to Compete with Cheap Foreign Labor Penalizes Lax Environmental Standards Prevents Rich Countries from Exploiting Developing Countries Reduces Offshore Outsourcing That Sends Good U.s. Jobs to Other Countries Avoiding Trade Wars Why Is International Trade Restricted? Is Offshore Outsourcing Bad or Good for America? Compensating Losers Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Part 3: Households’ Choices Chapter 8: Utility and Demand Consumption Choices Consumption Possibilities Preferences Utility-maximizing Choice A Spreadsheet Solution Choosing at the Margin The Power of Marginal Analysis Revealing Preferences Predictions of Marginal Utility Theory A Fall in the Price of a Movie A Rise in the Price of Soda A Rise in Income The Paradox of Value Temperature: an Analogy New Ways of Explaining Consumer Choices Behavioral Economics Controversy Neuroeconomics Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 9: Possibilities, Preferences, and Choices Consumption Possibilities Budget Line Budget Equation Preferences and Indifference Curves Marginal Rate of Substitution Degree of Substitutability Predicting Consumer Choices Best Affordable Choice A Change in Price A Change in Income Substitution Effect and Income Effect Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Part 4: Firms and Markets Chapter 10: Organizing Production The Firm and Its Economic Problem The Firm’s Goal Accounting Profit Economic Accounting A Firm’s Opportunity Cost of Production Economic Accounting: a Summary The Firm’s Decisions The Firm’s Constraints Technological and Economic Efficiency Economic Efficiency Technological Efficiency Information and Organization Command Systems Incentive Systems The Principal–agent Problem Coping with the Principal–agent Problem Types of Business Organization Principals and Agents at Apple Pros and Cons of Different Types of Firms Markets and the Competitive Environment Measures of Concentration Limitations of a Concentration Measure Produce or Outsource? Firms and Markets Firm Coordination Market Coordination Why Firms? Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 11: Output and Costs Decision Time Frames The Short Run The Long Run Short-run Technology Constraint Product Schedules Product Curves Total Product Curve Marginal Product Curve Average Product Curve Short-run Cost Total Cost Marginal Cost Average Cost Marginal Cost and Average Cost Why the Average Total Cost Curve Is U-shaped Cost Curves and Product Curves Checkout Cost Curves Shifts in the Cost Curves Long-run Cost The Production Function Short-run Cost and Long-run Cost The Long-run Average Cost Curve Economies and Diseconomies of Scale Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 12: Perfect Competition What Is Perfect Competition? How Perfect Competition Arises Price Takers Economic Profit and Revenue The Firm’s Decisions The Firm’s Output Decision Marginal Analysis and the Supply Decision Temporary Shutdown Decision The Firm’s Supply Curve Output, Price, and Profit in the Short Run Market Supply in the Short Run Short-run Equilibrium A Change in Demand Profits and Losses in the Short Run Three Possible Short-run Outcomes Output, Price, and Profit in the Long Run Entry and Exit A Closer Look at Entry A Closer Look at Exit Long-run Equilibrium Changes in Demand and Supply as Technology Advances A Decrease in Demand An Increase in Demand Technological Advances Change Supply Record Stores Enter The Falling Cost of Sequencing Dna Competition and Efficiency Efficient Use of Resources Choices, Equilibrium, and Efficiency Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 13: Monopoly Monopoly and How It Arises How Monopoly Arises Monopoly Price-setting Strategies A Single-price Monopoly’s Output and Price Decision Price and Marginal Revenue Marginal Revenue and Elasticity Price and Output Decision Single-price Monopoly and Competition Compared Comparing Price and Output Efficiency Comparison Redistribution of Surpluses Rent-seeking Equilibrium Rent Seeking Price Discrimination Two Ways of Price Discriminating A Price-discriminating Airline Increasing Profit and Producer Surplus Efficiency and Rent Seeking with Price Discrimination Microsoft Monopoly Efficient Regulation of a Natural Monopoly Monopoly Regulation Second-best Regulation of a Natural Monopoly Worked Problem Key Points Summary Key Terms Problems and Applications Additional Problems and Applications After Studying This Chapter, You Will Be Able To: Chapter 14: Monopolistic Competition What Is Monopolistic Competition? Large Number of Firms Product Differentiation Competing on Quality, Price, and Marketing Entry and Exit Examples of Monopolistic Competition Price and Output in Monopolistic Competition The Firm’s Short-run Output and Price Decision Profit Maximizing Might Be Loss Minimizing Long Run: Zero Economic Profit Monopolistic Competition and Perfect Competition Is Monopolistic Competition Efficient? Product Development and Marketing Product Development Advertising Using Advertising to Signal Quality Brand Names Efficiency of Advertising and Brand Names Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 15: Oligopoly What Is Oligopoly? Barriers to Entry Small Number of Firms Examples of Oligopoly Oligopoly Games What Is a Game? The Prisoners’ Dilemma An Oligopoly Price-fixing Game A Game of Chicken Repeated Games and Sequential Games A Repeated Duopoly Game Airbus Versus Boeing A Sequential Entry Game in a Contestable Market Antitrust Law The Antitrust Laws Price Fixing Always Illegal Three Antitrust Policy Debates Mergers and Acquisitions Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Part 5: Market Failure and Government Chapter 16: Public Choices, Public goods, and Healthcare Public Choices Why Governments? Public Choice and the Political Marketplace Political Equilibrium What Is a Public Good? A Fourfold Classification The Things Our Governments Buy Providing Public Goods The Free-rider Problem Marginal Social Benefit of a Public Good Marginal Social Cost of a Public Good Efficient Quantity of a Public Good Inefficient Private Provision Efficient Public Provision Inefficient Public Overprovision The Economics of Healthcare Healthcare Market Failure Alternative Public Choice Solutions Is Obamacare a Good Solution to the U.s. Healthcare Problem? Better Solutions? Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 17: Externalities Externalities in Our Lives Negative Production Externalities Positive Production Externalities Negative Consumption Externalities Positive Consumption Externalities Negative Externality: Pollution Private, External, and Social Cost Establish Property Rights Mandate Clean Technology Tax or Cap and Price Pollution Should We Be Doing More to Reduce Carbon Emissions? Coping with Global Externalities Negative Externality: the Tragedy of the Commons Unsustainable Use of a Common Resource Inefficient Use of a Common Resource Achieving an Efficient Outcome Positive Externality: Knowledge Private Benefits and Social Benefits Government Actions in the Market with External Benefits Illustrating an Efficient Outcome Bureaucratic Inefficiency and Government Failure Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Part 6: Factor Markets, Inequality, and Uncertainty Chapter 18: Markets for Factors of Production The Anatomy of Factor Markets Markets for Labor Services Markets for Capital Services Markets for Land Services and Natural Resources Entrepreneurship The Demand for a Factor of Production Value of Marginal Product A Firm’s Demand for Labor A Firm’s Demand for Labor Curve Changes in a Firm’s Demand for Labor Labor Markets A Competitive Labor Market Differences and Trends in Wage Rates A Labor Market with a Union Monopoly Power for Evil or Good? Capital and Natural Resource Markets Capital Rental Markets Land Rental Markets The Growth of the Sharing Economy Nonrenewable Natural Resource Markets Mathematical Note Present Value and Discounting Rent-versus-buy Decision Comparing Current and Future Dollars Compound Interest Discounting a Future Amount Present Value of a Sequence of Future Amounts The Decision Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 19: Economic Inequality Economic Inequality in the United States The Distribution of Income The Income Lorenz Curve The Distribution of Wealth Wealth or Income? Annual or Lifetime Income and Wealth? Trends in Inequality Poverty Inequality in the World Economy Income Distributions in Selected Countries Global Inequality and Its Trends The Sources of Economic Inequality Human Capital Discrimination Contests Among Superstars Unequal Wealth Income Redistribution Income Taxes Income Maintenance Programs Subsidized Services The Big Tradeoff Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 20: Uncertainty And Information Decisions in the Face of Uncertainty Expected Wealth Risk Aversion Utility of Wealth Expected Utility Making a Choice with Uncertainty Buying and Selling Risk Insurance Markets A Graphical Analysis of Insurance Risk That Can’t Be Insured Private Information Asymmetric Information: Examples and Problems The Market for Used Cars The Market for Loans The Market for Insurance Uncertainty, Information, and the Invisible Hand Information as a Good Monopoly in Markets That Cope with Uncertainty Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Part 7: Monitoring Macroeconomic Performance Chapter 21: Measuring the Value of Production: Gdp Gross Domestic Product Gdp Defined Gdp and the Circular Flow of Expenditure and Income Why “domestic” and Why “gross”? Measuring U.S. Gdp The Expenditure Approach The Income Approach Nominal Gdp and Real Gdp Calculating Real Gdp The Uses and Limitations of Gdp The Standard of Living over Time The Standard of Living Across Countries Limitations of Gdp Should Gnnp Replace Gdp? Appendix Graphs in Macroeconomics After Studying This Appendix, You Will Be Able To: The Time-series Graph Making a Time-series Graph Reading a Time-series Graph Ratio Scale Reveals Trend A Time-series with a Trend Using a Ratio Scale Mathematical Note Chained-dollar Real Gdp Value Production in Prices of Adjacent Years Find the Average of Two Percentage Changes Link (chain) to the Base Year Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 22: Monitoring Jobs And Inflation Employment and Unemployment Why Unemployment Is a Problem Current Population Survey Three Labor Market Indicators Other Definitions of Unemployment Most Costly Unemployment Alternative Measures of Unemployment Unemployment and Full Employment Frictional Unemployment Structural Unemployment Cyclical Unemployment “natural” Unemployment Real Gdp and Unemployment over the Cycle The Price Level, Inflation, and Deflation Why Inflation and Deflation Are Problems The Consumer Price Index Reading the Cpi Numbers Constructing the Cpi Measuring the Inflation Rate Distinguishing High Inflation from a High Price Level The Biased Cpi Alternative Price Indexes Consequences and Magnitude of Bias Core Inflation Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Part 8: Macroeconomic Trends Chapter 23: Economic Growth The Basics of Economic Growth Calculating Growth Rates Economic Growth Versus Business Cycle Expansion The Magic of Sustained Growth Applying the Rule of 70 Long-term Growth Trends Long-term Growth in the U.S. Economy Real Gdp Growth in the World Economy How Potential Gdp Grows What Determines Potential Gdp? What Makes Potential Gdp Grow? Why Labor Productivity Grows Preconditions for Labor Productivity Growth Physical Capital Growth Human Capital Growth Technological Advances Robots Raise Labor Productivity Is Economic Growth Sustainable? Theories, Evidence, and Policies Classical Growth Theory Neoclassical Growth Theory New Growth Theory New Growth Theory Versus Malthusian Theory Sorting Out the Theories The Empirical Evidence on the Causes of Economic Growth Policies for Achieving Faster Growth Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 24: Finance, Saving, And Investment Financial Markets and Financial Institutions Finance and Money Capital and Financial Capital Capital and Investment Wealth and Saving Financial Capital Markets Financial Institutions Funds That Finance Investment Financial Decisions and Risks The Time Value of Money Net Present Value The Decision Rule Financial Risk: Insolvency and Illiquidity Market Risk: Interest Rates and Asset Prices Getting Real The Loanable Funds Market The Demand for Loanable Funds The Supply of Loanable Funds Equilibrium in the Loanable Funds Market Changes in Demand and Supply Government in the Loanable Funds Market A Government Budget Surplus A Government Budget Deficit Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 25: Money, the Price Level, And Inflation What Is Money? Medium of Exchange Unit of Account Store of Value Money in the United States Today Depository Institutions Types of Depository Institutions What Depository Institutions Do Economic Benefits Provided by Depository Institutions How Depository Institutions Are Regulated Fractional-reserve Banking Versus 100 Percent Reserve Banking Financial Technology The Federal Reserve System The Structure of the Fed The Fed’s Balance Sheet The Fed’s Policy Tools How Banks Create Money Creating Deposits by Making Loans The Money Creation Process The Money Multiplier A Massive Open Market Operation The Money Market The Demand for Money Changes in the Demand for Money The Supply of Money Money Market Equilibrium The Quantity Theory of Money Mathematical Note The Money Multiplier The U.S. Money Multiplier Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 26: The Exchange Rate and the Balance of Payments The Foreign Exchange Market Trading Currencies Exchange Rates Questions About the U.S. Dollar Exchange Rate An Exchange Rate Is a Price The Demand for One Money Is the Supply of Another Money Demand in the Foreign Exchange Market Demand Curve for U.S. Dollars Supply in the Foreign Exchange Market Supply Curve for U.S. Dollars Market Equilibrium Changes in the Demand for U.S. Dollars Changes in the Supply of U.S. Dollars Changes in the Exchange Rate Arbitrage, Speculation, and Market Fundamentals Arbitrage Speculation Market Fundamentals Exchange Rate Policy Flexible Exchange Rate Fixed Exchange Rate Crawling Peg Financing International Trade Balance of Payments Accounts Borrowers and Lenders The Global Loanable Funds Market Debtors and Creditors Is U.S. Borrowing for Consumption? Current Account Balance Net Exports Where Is the Exchange Rate? Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Part 9: Macroeconomic Fluctuations Chapter 27: Aggregate Supply and Aggregate Demand Aggregate Supply Quantity Supplied and Supply Long-run Aggregate Supply Short-run Aggregate Supply Changes in Aggregate Supply Aggregate Demand The Aggregate Demand Curve Changes in Aggregate Demand Explaining Macroeconomic Trends and Fluctuations Short-run Macroeconomic Equilibrium Long-run Macroeconomic Equilibrium Economic Growth and Inflation in the AS-AD Model The Business Cycle in the AS-AD Model Fluctuations in Aggregate Demand Fluctuations in Aggregate Supply Macroeconomic Schools of Thought The Classical View The Keynesian View The Monetarist View The Way Ahead Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 28: Expenditure Multipliers Fixed Prices and Expenditure Plans Expenditure Plans Consumption and Saving Plans Marginal Propensities to Consume and Save Slopes and Marginal Propensities Consumption as a Function of Real Gdp Import Function Real Gdp with a Fixed Price Level Aggregate Planned Expenditure Actual Expenditure, Planned Expenditure, and Real Gdp Equilibrium Expenditure Convergence to Equilibrium The Multiplier The Basic Idea of the Multiplier The Multiplier Effect Why Is the Multiplier Greater Than 1? The Size of the Multiplier The Multiplier and the Slope of the AE Curve Imports and Income Taxes The Multiplier Process Business Cycle Turning Points The Multiplier and the Price Level Adjusting Quantities and Prices Aggregate Expenditure and Aggregate Demand Deriving the Aggregate Demand Curve Changes in Aggregate Expenditure and Aggregate Demand Equilibrium Real Gdp and the Price Level Mathematical Note The Algebra of the Keynesian Model Aggregate Expenditure Equilibrium Expenditure The Multiplier Government Expenditure Multiplier Autonomous Tax Multiplier Balanced Budget Multiplier Exercise Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 29: The Business Cycle, Inflation, And Deflation The Business Cycle Mainstream Business Cycle Theory Real Business Cycle Theory Inflation Cycles Demand-pull Inflation Cost-push Inflation Expected Inflation Forecasting Inflation Inflation and the Business Cycle Deflation What Causes Deflation? What Are the Consequences of Deflation? How Can Deflation Be Ended? The Phillips Curve The Short-run Phillips Curve The Long-run Phillips Curve Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Part 10: Macroeconomic Policy Chapter 30: Fiscal Policy The Federal Budget The Institutions and Laws Highlights of the 2022 Budget The Budget in Historical Perspective Budget Balance and Debt State and Local Budgets Supply-side Effects of Fiscal Policy Full Employment and Potential Gdp The Effects of the Income Tax Taxes on Expenditure and the Tax Wedge Taxes and the Incentive to Save and Invest Tax Revenues and the Laffer Curve The Supply-side Debate Generational Effects of Fiscal Policy Generational Accounting and Present Value The Social Security Time Bomb Generational Imbalance International Debt Fiscal Stimulus Automatic Fiscal Policy and Cyclical and Structural Budget Balances Discretionary Fiscal Stimulus Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Chapter 31: Monetary Policy Monetary Policy Objectives and Framework Monetary Policy Objectives Operational “stable Prices” Goal Operational “maximum Employment” Goal Responsibility for Monetary Policy The Conduct of Monetary Policy The Monetary Policy Instruments Monetary Policy Decisions Hitting the Federal Funds Rate Target Fomc Inflation Hawks and Doves Monetary Policy Transmission Quick Overview Changes in Money and Loans Changes in Interest Rates The Change in Aggregate Demand, Real Gdp, and the Price Level Changes in Real Gdp, Unemployment, and Inflation The Fed Fights Recession The Fed Fights Inflation Loose Links and Long and Variable Lags Policy Strategies and Clarity Financial Crisis: Cure and Prevention The Anatomy of the Financial Crisis The Fed’s Policy Actions in Crisis Congress’s Policy Actions in Crisis Macroprudential Regulation Worked Problem Summary Key Points Key Terms Problems and Applications Additional Problems and Applications Glossary Index Credits