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Tables of Contents for Exploring Microeconomics
Chapter/Section Title
Page #
Page Count
MODULE 1 ECONOMICS: TEN POWERFUL IDEAS
2
38
Economics: A Definition
4
3
What is economics?
Wants and Desires
7
3
In the News: Clinton Mourns the Loss of two Remarkable Women
9
1
Can all of our wants and desires be satisfied?
Scarcity
10
2
Did nature provide enought for all of our wants?
Choices
12
3
Can we have our cake and eat it too?
Marginal Thinking
15
2
What is the rule of rational choice?
Incentives Matter
17
4
Tune Up: Do Incentives Matter?
18
1
In the News: Survey Finds cheating not uncommon among top U.S. High School Students
19
1
Global Watch: Drunk Driving Draws Global Wrath
20
1
Tune Up: Comparative Advantage
21
1
Do people respond to incentives?
Specialization and Trade
21
3
In the News: Michael Jordan Signs New Contract
23
1
How can specialization and trade lead to greater economic growth?
Markets and the Price System
24
3
Can markets and the price system make consumers and producers better off?
Government Policies
27
3
Can appropriate government policies improve our economic well-being?
Economic Growth
30
2
Can economic growth improve overall standards of living?
Global Watch: Correlation of Investment and Growth
31
1
Price Stability
32
2
Will price stability enable producers and consumers to make better plans and decisions?
Application: Laws and Enforcement Costs
34
4
How can strict laws function as incentives to influence behavior?
One Step Beyond
36
2
MODULE 2 THE ROLE AND METHOD OF ECONOMICS
38
26
Economics as a Science
40
3
Why is economics useful?
Economic Behavior
43
2
Can economists predict human behavior?
Economic Theory
45
3
Why do we need a theory?
Problems with Scientific Thinking
48
4
What are the key problems in scientific thinking?
In the News: Heavy Metal Music and Teen Suicide
51
1
Positive and Normative Analysis
52
4
Why is it important that we distinguish between positive and normative analysis?
Application: Scientists and Global Warming
56
8
Why must we be so careful about association and correlation?
One Step Beyond
57
1
Appendix: Working with Graphs
58
6
MODULE 3 SCARCITY AND THE ECONOMIZING PROBLEM
64
22
The Factors of Production
66
3
In the News: Bill Gates, the Entrepreneur
68
1
What are the factors of production?
The Production Possibilities Curve
69
4
Why is the production possibilities curve useful?
Tune Up: The Production Possibilities Curve
71
2
Production Decisions
73
3
What and how much should we produce?
Global Watch: Government Spending as a Percentage of GDP, 1920 and 1996
74
1
Tune Up: Did the Market Fail?
75
1
Production Methods
76
2
How will we produce those goods and services?
In the News: Labor-Saving Anti-Theft Devices
77
1
Distribution of Output
78
1
Who will get the goods and services we produce?
Efficiency in Production
79
2
How can we use our scarce resources efficiently?
Production and Growth
81
3
What do we have to sacrifice today to achieve greater economic growth?
Global Watch: Five Richest and Five Poorest Nations in Output Per Person
81
2
Tune Up: Production Possibilities Curve
83
1
Application: Tourism versus Ecosystems
84
2
Can we have more tourism and a better environment at the same time?
One Step Beyond
85
1
MODULE 4 SUPPLY AND DEMAND
86
32
Markets
88
2
What is a market?
Money and Relative Prices
90
2
Why are relative prices so important?
In the News: Lundberg Survey Says Gasoline Prices Hit Historic Low in 1998
90
1
Tune Up: Tooling Up: Relative Prices
91
1
The Law of Demand
92
4
What is the difference between needs and wants?
In the News: Goodyear Begins Search for Highway Heroes
94
2
The Demand Curve
96
3
Why is the demand curve negatively sloped?
In the News: Is There a Demand Curve for Roadkill
97
2
Shifts in the Demand Curve
99
9
What are the major variables that determine the position of the demand curve?
In the News: Can a Wiener Become a Poorer Substitute for Hamburger
100
1
Tune Up: Substitute Goods
101
1
Tune Up: Complementary Goods
102
1
Tune Up: Normal and Inferior Goods
103
1
Tune Up: Expectations of Higher Prices
104
2
In the News: What is a Tamagotchi?
106
1
Tune Up: Changes in Demand Versus Changes in Quantity Demanded
106
2
The Law of Supply
108
2
Why is the supply curve positively sloped?
Shifts in the Supply Curve
110
6
What are the major variables that determine the position of the supply curve?
Tune Up: Suppliers' Input Prices
111
1
Tune Up: Expectations can Shift Supply
112
1
Tune Up: Taxes and Regulations as Supply Shifters
112
1
In the News: Supply Shifters in the Oil Industry
113
2
Tune Up: Change in Supply Versus Change in Quantity Supplied
115
1
Application: A Shift in the Demand for Cuban Cigars
116
2
Which variables have impacted the demand curve for Cuban cigars?
One Step Beyond
117
1
MODULE 5 MARKETS IN MOTION
118
24
Market Equilibrium Price and Quantity
120
4
Why is the concept of market equilibrium such a valuable tool?
Tune Up: Shortages
121
1
Tune Up: Shortages and Surpluses
122
2
Changes in Equilibrium Price and Quantity
124
4
What happens to equilibrium price and quantity when we shift the supply or demand curve?
Global Watch: Coffeee, Cocoa Prices Rise on EL Nino Concerns
126
1
Tune Up: The Impact of a Change in Demand on Equilibrium Price and Quantity
126
1
Tune Up: The Impact of a Change in Supply on Equilibrium Price and Quantity
127
1
Shifting Supply and Demand Together
128
5
What happens when supply and demand both shift?
Tune Up: Shifts in Both Supply and Demand
130
1
In the News: Kidneys for Sale?
131
2
Temporary Disequilibrium
133
3
What happens when companies do not correctly anticipate the demand for their products?
Price Controls
136
4
What are price ceilings and price floors?
Application: Supply and Demand in the Market for Super Bowl Tickets
140
1
How does the market for Super Bowl tickets work?
One Step Beyond
141
1
MODULE 6 GOVERNMENT AND THE ECONOMY
142
36
Government and Property Rights
144
2
Should government protect property rights?
Government and Externalities
146
4
Should government intervene to correct externalities?
Government and Public Goods
150
3
Should government provide public goods and services?
Government and Information Costs
153
4
Should government provide information to consumers?
In the News: Rudolph the Red-taped Reindeer
155
2
Other Government Functions
157
2
How does government try to prevent insufficient competition and achieve its macroeconomic goals?
Government and Income Distribution
159
3
Should government work to create more equality in income distribution?
Public Choice
162
6
Is politics influenced by self-interest?
Tune Up: Rational Ignorance
164
2
In the News: Wild Pitch
166
2
Spending and Taxation
168
6
How do we pay for government?
In the News: Controversial Transit Bill Passes in House
171
1
Global Watch: A Global Comparison of Taxation
172
2
Application: Revving Up the Helmet Law Debate
174
4
Can a balance of the freedom of the rider and the freedom of the taxpayer be found?
One Step Beyond
176
2
MODULE 7 CONSUMER CHOICE AND ELASTICITIES
178
32
Consumer Behavior
180
3
What is utility?
Tune Up: Marginal Utility
182
1
The Consumer's Choice
183
3
How do consumers maximize their satisfaction?
Consumer Surplus
186
4
What is consumer surplus?
Tune Up: Consumer Surplus
188
2
Price Elasticity of Demand
190
7
What is price elasticity of demand?
In the News: Clinton Targets Teen Smoking
194
1
In the News: Earth's Biggest Bookstore
195
2
Total Revenue and Price Elasticity of Demand
197
3
What is the relationship between price, total revenue, and the price elasticity of demand?
Tune Up: Elasticities and Total Revenue
198
2
Other Types of Elasticities
200
7
How are other types of elasticities useful?
Global Watch: Drugs Across the Border
205
2
Application: Condoms and Elasticities
207
3
If sexual activity becomes less risky, is it possible there will be more sexually transmitted diseases?
One Step Beyond
209
1
MODULE 8 PRODUCTION AND COSTS
210
22
Tune Up: Explicit and Implicit Costs
213
1
Tune Up: Accounting Profits and Economic Profits
214
Profits: Total Revenues Minus Total Costs
212
4
How do we measure profits?
The Production Function
216
4
What is the law of diminishing marginal product?
Costs in the Short Run
220
4
How are fixed costs different from variable costs?
Tune Up: Average Total Costs
221
1
Tune Up: Marginal Costs
221
3
Short-Run Costs and Diminishing Marginal Product
224
4
How does diminishing marginal product affect the short-run cost curves?
Tune Up: Relating Marginal and Average Total Costs
226
1
In the News: California's Three Strikes Law
226
2
Cost Curves: Short Run versus Long Run
228
2
What are economies and diseconomies of scale?
Application: Cineplexes and Economies of Scale
230
2
Why have cineplex theaters replaced single-screen theaters?
One Step Beyond
231
1
MODULE 9 PERFECT COMPETITION
232
22
A Perfectly Competitive Market
234
3
What are the characteristics of perfect competition?
Tune Up: The Perfectly Competitive Market
235
3
Tune Up: Characteristics of a Perfectly Competitive Market
238
An Individual Seller's Demand Curve
237
4
Why can't an individual seller charge more than the market price?
Profit Maximization
241
3
What is the profit-maximizing output level for a perfectly competitive firm?
Short-Run Profits and Losses
244
4
How can you determine if a perfectly competitive firm is generating a short-run profit or loss?
Tune Up: Evaluating Short-Run Economic Losses
246
2
Long-Run Equilibrium
248
2
What is the long-run response to economic profits in perfect competition?
Long-Run Industry Supply
250
2
What are constant- and increasing-cost industries?
Application: Cybergambling
252
2
Will cybergambling cut into market profits?
One Step Beyond
253
1
MODULE 10 MONOPOLY
254
28
Monopoly: The Price Maker
256
4
What is a monopoly?
Tune Up: Demand and Marginal Revenue
258
2
The Monopolist's Equilibrium
260
3
How do you find equilibrium price and output in monopoly?
Arguments Against and For Monopoly
263
5
Can a monopoly be good?
In the News: Is Microsoft a Monopoly?
266
2
Monopoly Policy
268
4
What are three common approaches that are used to deal with the monopoly problem?
Government Monopoly
272
3
What is a government monopoly?
Price Discrimination
275
3
What is price discrimination?
Tune Up: Price Discrimination
276
1
Tune Up: Price Discrimination
277
1
Application: Let's Play Monopoly
278
4
What is the ``best'' monopoly in America?
One Step Beyond
280
2
MODULE 11 MONOPOLISTIC COMPETITION
282
20
Monopolistic Competition
284
4
What are the distinguishing characteristics of monopolistic competition?
In the News: Is a Beer a Beer?
285
2
In the News: Stores Crack Down on Return Policies
287
1
Price and Output Determination in Monopolistic Competition
288
4
How are equilibrium price and output determined in monopolistic competition?
Tune Up: Long-Run Equilibrium
290
1
In the News: Burger King's Left-Handed Hamburger
291
1
Monopolistic Competition versus Perfect Competition
292
4
What are the similarities and differences between monopolistic competition and perfect competition?
In the News: Rei: Try It, You'll Like It
294
2
Advertising
296
3
Is advertising a waste of society's resources?
Tune Up: Advertising
297
2
Application: New Balance Carves Out a Niche
299
3
How does New Balance differentiate its product?
One Step Beyond
300
2
MODULE 12 OLIGOPOLY
302
16
Oligopoly
304
3
What are the distinguishing characteristics of oligopoly?
In the News: Beer Wars
306
1
Collusion and Cartels
307
3
What is collusion?
In the News: The Crash of an Airline Collusion
309
1
Oligopoly in the Long Run
310
2
Can market entry be deterred in the long run?
Tune Up: Mutual Interdependence in Oligopoly
310
2
Game Theory and Strategic Behavior
312
4
How does game theory enlighten our understanding of the strategic behavior of oligopolists?
Application: The OPEC Cartel
316
2
How has OPEC impacted the oil market?
One Step Beyond
317
1
MODULE 13 SUPPLY AND DEMAND IN INPUT MARKETS
318
28
Input Markets
320
2
How do supply and demand determine price and quantities in input markets?
Supply and Demand in the Labor Market
322
6
What determines the slopes of the demand and supply curves for labor?
Tune Up: Labor Supply and Demand
326
2
Labor Market Equilibrium
328
6
How is equilibrium determined in the labor market?
Tune Up: Labor Market Equilibrium
329
2
Tune Up: Changes in Labor Productivity
331
1
Tune Up: Changes in Product Demand
332
2
Labor Unions
334
3
What impact do labor unions have on labor markets?
Global Watch: Union Wage Premiums in Selected Countries
336
1
Labor Productivity and Wages
337
2
What impact does labor productivity have on living standards?
Land and Capital
339
3
How are rental prices determined?
Application: Immigration
342
4
Do immigrants necessarily take jobs from domestic workers?
One Step Beyond
344
2
MODULE 14 INCOME DISTRIBUTION AND POVERY
346
24
Income Distribution
348
5
How equal is the distribution of income?
Tune Up: Demographic Factors and Income Distribution
349
4
The Pros and Cons of Income Equality
353
5
What are the arguments for and against a more equal distribution of income?
Tune Up: Income Redistribution
357
1
The Economics of Discrimination
358
5
What are the effects of discrimination?
Poverty
363
3
How do absolute measures of poverty differ from relative measures?
Tune Up: Poverty
364
2
Application: Welfare Reform
366
4
How does the principle ``incentives matter'' relate to welfare reform?
One Step Beyond
368
2
MODULE 15 THE ENVIRONMENT
370
18
Negative Externalities
372
4
What are private and social costs?
Tune Up: Negative Externalities
374
1
In the News: How Risky is it to Talk and Drive?
375
1
Public Policy and the Environment
376
7
What are some public policy solutions to externalities?
Tune Up: Relative Costs and Benefits of Pollution Control
379
1
Tune Up: Pollution Taxes
380
2
Tune Up: Incentives and Pollution
382
1
Property Rights
383
2
What is the Coase Theorem?
Application: California's Smoke-Free Bars
385
3
Who owns the rights to pollute the air in restaurants and bars?
One Step Beyond
386
2
MODULE 16 INTERNATIONAL TRADE
388
21
The Growth in World Trade
390
3
How important is international trade?
In the News: Baywatch is world watched
393
1
Comparative Advantage and Gains from Trade
393
5
What is the difference between comparative advantage and absolute advantage?
Tune Up: Comparative Advantage
395
1
In the News: The Miracle of Trade
396
2
Supply and Demand in International Trade
398
3
Who gains and who loses from exports and imports?
Tariffs, Import Quotas, and Subsidies
401
4
How do tariffs, import quotas, and subsidies impact the domestic economy?
Application: Common Misperceptions on Trade
405
4
Are the welfare gains associated with trade overstated?
One Step Beyond
407
2
Answers to Concept Check Questions
409
34
Glossary
443
6
Index
449