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Table of Contents

    • About the Authors
    • Acknowledgments
    • Preface
    • 1Economics: The Study of Choice
      • 1.1Start Up: Economics in the News
      • 1.2Defining Economics
      • 1.3The Field of Economics
      • 1.4The Economists’ Tool Kit
      • 1.5Review and Practice
    • 2Confronting Scarcity: Choices in Production

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      • 2.1Start Up: An Attempt to Produce Safer Air Travel

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      • 2.2Factors of Production

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      • 2.3The Production Possibilities Curve

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      • 2.4Applications of the Production Possibilities Model

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      • 2.5Review and Practice

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    • 3Demand and Supply

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      • 3.1Start Up: Crazy for Coffee

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      • 3.2Demand

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      • 3.3Supply

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      • 3.4Demand, Supply, and Equilibrium

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      • 3.5Review and Practice

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    • 4Applications of Demand and Supply

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      • 4.1Start Up: A Composer Logs On

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      • 4.2Putting Demand and Supply to Work

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      • 4.3Government Intervention in Market Prices: Price Floors and Price Ceilings

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      • 4.4The Market for Health-Care Services

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      • 4.5Review and Practice

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    • 5Elasticity: A Measure of Response

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      • 5.1Start Up: Raise Fares? Lower Fares? What’s a Public Transit Manager To Do?

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      • 5.2The Price Elasticity of Demand

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      • 5.3Responsiveness of Demand to Other Factors

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      • 5.4Price Elasticity of Supply

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      • 5.5Review and Practice

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    • 6Markets, Maximizers, and Efficiency

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      • 6.1Start Up: A Drive in the Country

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      • 6.2The Logic of Maximizing Behavior

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      • 6.3Maximizing in the Marketplace

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      • 6.4Market Failure

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      • 6.5Review And Practice

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    • 7The Analysis of Consumer Choice

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      • 7.1Start Up: A Day at the Grocery Store

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      • 7.2The Concept of Utility

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      • 7.3Utility Maximization and Demand

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      • 7.4Indifference Curve Analysis: An Alternative Approach to Understanding Consumer Choice

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      • 7.5Review and Practice

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    • 8Production and Cost

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      • 8.1Start Up: Street Cleaning Around the World

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      • 8.2Production Choices and Costs: The Short Run

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      • 8.3Production Choices and Costs: The Long Run

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      • 8.4Review and Practice

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    • 9Competitive Markets for Goods and Services

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      • 9.1Start Up: Life on the Farm

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      • 9.2Perfect Competition: A Model

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      • 9.3Output Determination in the Short Run

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      • 9.4Perfect Competition in the Long Run

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      • 9.5Review and Practice

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    • 10Monopoly

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      • 10.1Start Up: Surrounded by Monopolies

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      • 10.2The Nature of Monopoly

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      • 10.3The Monopoly Model

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      • 10.4Assessing Monopoly

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      • 10.5Review and Practice

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    • 11The World of Imperfect Competition

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      • 11.1Start Up: The Excitement of Groupon: What Rivals Will It Face?

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      • 11.2Monopolistic Competition: Competition Among Many

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      • 11.3Oligopoly: Competition Among the Few

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      • 11.4Extensions of Imperfect Competition: Advertising and Price Discrimination

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      • 11.5Review and Practice

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    • 12Wages and Employment in Perfect Competition

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      • 12.1Start Up: College Pays

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      • 12.2The Demand for Labor

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      • 12.3The Supply of Labor

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      • 12.4Labor Markets at Work

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      • 12.5Review and Practice

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    • 13Interest Rates and the Markets for Capital and Natural Resources

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      • 13.1Start Up: Mars—Here We Come!

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      • 13.2Time and Interest Rates

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      • 13.3Interest Rates and Capital

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      • 13.4Natural Resources and Conservation

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      • 13.5Review and Practice

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    • 14Imperfectly Competitive Markets for Factors of Production

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      • 14.1Start Up: Hockey Players Frozen Out

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      • 14.2Price-Setting Buyers: The Case of Monopsony

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      • 14.3Monopsony and the Minimum Wage

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      • 14.4Price Setters on the Supply Side

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      • 14.5Review and Practice

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    • 15Public Finance and Public Choice

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      • 15.1Start Up: Where Your Tax Dollars Go

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      • 15.2The Role of Government in a Market Economy

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      • 15.3Financing Government

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      • 15.4Choices in the Public Sector

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      • 15.5Review and Practice

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    • 16Antitrust Policy and Business Regulation

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      • 16.1Start Up: The Plastic War

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      • 16.2Antitrust Laws and Their Interpretation

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      • 16.3Antitrust and Competitiveness in a Global Economy

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      • 16.4Regulation: Protecting People from the Market

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      • 16.5Review and Practice

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    • 17International Trade

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      • 17.1Start Up: Trade Winds

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      • 17.2The Gains from Trade

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      • 17.3Two-Way Trade

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      • 17.4Restrictions on International Trade

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      • 17.5Review and Practice

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    • 18The Economics of the Environment

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      • 18.1Start Up: Environmental Headwinds

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      • 18.2Maximizing the Net Benefits of Pollution

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      • 18.3Alternatives in Pollution Control

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      • 18.4Review and Practice

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    • 19Inequality, Poverty, and Discrimination

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      • 19.1Start Up: Occupy Wall Street and the World

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      • 19.2Income Inequality

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      • 19.3The Economics of Poverty

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      • 19.4The Economics of Discrimination

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      • 19.5Review and Practice

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    • 20Macroeconomics: The Big Picture

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      • 20.1Start Up: Economy Limps Along

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      • 20.2Growth of Real GDP and Business Cycles

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      • 20.3Price-Level Changes

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      • 20.4Unemployment

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      • 20.5Review and Practice

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    • 21Measuring Total Output and Income

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      • 21.1Start Up: The Lockup

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      • 21.2Measuring Total Output

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      • 21.3Measuring Total Income

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      • 21.4GDP and Economic Well-Being

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      • 21.5Review and Practice

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    • 22Aggregate Demand and Aggregate Supply

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      • 22.1Start Up: The Great Warning

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      • 22.2Aggregate Demand

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      • 22.3Aggregate Demand and Aggregate Supply: The Long Run and the Short Run

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      • 22.4Recessionary and Inflationary Gaps and Long-Run Macroeconomic Equilibrium

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      • 22.5Review and Practice

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    • 23Economic Growth

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      • 23.1Start Up: How Important Is Economic Growth?

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      • 23.2The Significance of Economic Growth

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      • 23.3Growth and the Long-Run Aggregate Supply Curve

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      • 23.4Determinants of Economic Growth

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      • 23.5Review and Practice

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    • 24The Nature and Creation of Money

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      • 24.1Start Up: How Many Macks Does It Cost?

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      • 24.2What Is Money?

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      • 24.3The Banking System and Money Creation

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      • 24.4The Federal Reserve System

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      • 24.5Review and Practice

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    • 25Financial Markets and the Economy

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      • 25.1Start Up: Clamping Down on Money Growth

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      • 25.2The Bond and Foreign Exchange Markets

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      • 25.3Demand, Supply, and Equilibrium in the Money Market

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      • 25.4Review and Practice

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    • 26Monetary Policy and the Fed

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      • 26.1Start Up: The Fed’s Extraordinary Challenges in 2008

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      • 26.2Monetary Policy in the United States

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      • 26.3Problems and Controversies of Monetary Policy

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      • 26.4Monetary Policy and the Equation of Exchange

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      • 26.5Review and Practice

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    • 27Government and Fiscal Policy

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      • 27.1Start Up: A Massive Stimulus

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      • 27.2Government and the Economy

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      • 27.3The Use of Fiscal Policy to Stabilize the Economy

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      • 27.4Issues in Fiscal Policy

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      • 27.5Review and Practice

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    • 28Consumption and the Aggregate Expenditures Model

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      • 28.1Start Up: A Dismal Year for Retailers

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      • 28.2Determining the Level of Consumption

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      • 28.3The Aggregate Expenditures Model

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      • 28.4Aggregate Expenditures and Aggregate Demand

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      • 28.5Review and Practice

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    • 29Investment and Economic Activity

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      • 29.1Start Up: Jittery Firms Slash Investment

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      • 29.2The Role and Nature of Investment

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      • 29.3Determinants of Investment

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      • 29.4Investment and the Economy

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      • 29.5Review and Practice

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    • 30Net Exports and International Finance

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      • 30.1Start Up: Currency Crises Shake the World

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      • 30.2The International Sector: An Introduction

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      • 30.3International Finance

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      • 30.4Exchange Rate Systems

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      • 30.5Review and Practice

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    • 31Inflation and Unemployment

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      • 31.1Start Up: The Inflation/Unemployment Conundrum

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      • 31.2Relating Inflation and Unemployment

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      • 31.3Explaining Inflation–Unemployment Relationships

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      • 31.4Inflation and Unemployment in the Long Run

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      • 31.5Review and Practice

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    • 32A Brief History of Macroeconomic Thought and Policy

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      • 32.1Start Up: Three Revolutions in Macroeconomic Thought

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      • 32.2The Great Depression and Keynesian Economics

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      • 32.3Keynesian Economics in the 1960s and 1970s

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      • 32.4Macroeconomics for the 21st Century

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      • 32.5Review and Practice

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    • AGraphs in Economics

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      • A.1How to Construct and Interpret Graphs

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      • A.2Nonlinear Relationships and Graphs without Numbers

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      • A.3Using Graphs and Charts to Show Values of Variables

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    • BExtensions of the Aggregate Expenditures Model

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      • B.1The Algebra of Equilibrium

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      • B.2The Aggregate Expenditures Model and Fiscal Policy

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      • B.3Review and Practice

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