Economics

Front Cover
W.W. Norton, 1993 - Economics - 1142 pages
1 Review
Preface p. XXIII
Part 1 Introduction
Chapter 1 The Motor Industry and Economics p. 1
The Motor Industry: A Brief History p. 2
Nationalization p. 6
Industrial Relations p. 7
The Extent of the Market p. 7
What is Economics? p. 8
Markets and Government in the Mixed Economy p. 11
Close-up: A Failed Alternative to the Mixed Economy p. 13
Microeconomics and Macroeconomics: the Two Branches of Economics p. 14
The Science of Economics p. 15
Why Economists Disagree p. 17
Close-up: Economists Agree!! p. 18
Consensus on the Importance of Scarcity p. 19
Review and Practice p. 19
Chapter 2 Basic Principles p. 22
The Basic Competitive Model p. 23
Prices, Property Rights, and Profits: Incentives and Information p. 25
Rationing p. 27
Opportunity Sets p. 27
Cost p. 32
Close-up: Opportunity Costs of Meetings p. 33
Review and Practice p. 35
Appendix Reading Graphs p. 37
Chapter 3 Trade p. 41
The Benefits of Economic Interdependence p. 42
Trade Between Countries p. 43
Using Economics: Calculating the Gains from Trade p. 49
Close-up: What Does Britain Export and Import? p. 50
The Perceived Costs of International Interdependence p. 52
Policy Perspective: Free Trade p. 53
Review and Practice p. 55
Chapter 4 Demand, Supply, and Price p. 57
The Role of Prices p. 58
Demand p. 59
Supply p. 64
Policy Perspective: Stabilising Farm Incomes and Stabilising Agricultural Prices p. 65
Using Economics: The Late 1980s Boom in House Prices p. 66
Law of Supply and Demand p. 71
Close-up: The Structure of Economic Models p. 72
Price, Value, and Cost p. 74
Review and Practice p. 75
Chapter 5 Using Demand and Supply p. 78
Sensitivity to Price Changes: the Price Elasticity of Demand p. 79
The Determinants of the Elasticity of Demand p. 84
The Price Elasticity of Supply p. 85
Using Demand and Supply Elasticities p. 88
Shortages and Surpluses p. 90
Interfering with the Law of Supply and Demand p. 91
Policy Perspective: Tax Competition and Cross-Border Shopping p. 92
Close-up: Interfering with the Market for Housing p. 94
Review and Practice p. 96
Chapter 6 Time and Risk p. 99
Interest p. 100
Using Economics: The Effects of Compound Interest p. 101
The Market for Loanable Funds p. 102
Inflation and the Real Rate of Interest p. 103
The Market for Assets p. 104
The Market for Risk p. 106
Close-up: The Lloyd’s Insurance Market p. 108
Policy Perspective: Should the National Health Service Treat Smokers? p. 110
Entrepreneurship p. 111
An Overview of Financial Markets p. 112
Review and Practice p. 112
Appendix Calculating Present Discounted Value p. 114
Chapter 7 The Public Sector p. 115
The Changing Role of Government p. 116
Adam Smith’s "Invisible Hand" and the Central Role of Markets p. 120
Government and Ignorance of Economics p. 120
Close-up: Adam Smith--Founder of Modern Economics p. 121
Government and Redistribution p. 121
Government and Market Failures p. 122
Using Economics: Dealing with Externalities p. 125
Government’s Options p. 128
Policy Perspective: Public Provision of Pensions p. 129
Close-up: International Perspectives p. 130
Government Failures p. 131
Review and Practice p. 133
Part 2 Perfect Markets
Chapter 8 The Consumption Decision p. 137
The Basic Problem of Consumer Choice p. 138
A Closer Look at the Demand Curve p. 142
Policy Perspective: Calculating Tax Revenues p. 143
Close-up: International Price and Income Elasticities for Food p. 144
Using Economics: Environmental Taxes p. 146
Utility and the Description of Preferences p. 147
Looking Beyond the Basic Model: How Well do the Underlying Assumptions Match Reality? p. 151
Review and Practice p. 152
Appendix Indifference Curves and the Consumption Decision p. 154
Chapter 9 Labour Supply and Savings p. 161
The Labour Supply Decision p. 162
Close-up: The "Rational" Couple’s Debate p. 164
Policy Perspective: Growth of Female Participation in the Labour Force p. 168
Human Capital and Education p. 169
Budget Constraints and Savings p. 172
Close-up: Why Are Savings in Britain So Low? p. 175
Review and Practice p. 176
Appendix Indifference Curves and the Labour Supply and Savings Decisions p. 178
Chapter 10 The Firm’s Costs p. 182
Profits, Costs, and Factors of Production p. 183
Short-run and Long-run Cost Curves p. 195
Using Economics: Economies of Scale and the Structure of Industries p. 197
Looking Beyond the Basic Model: Cost Curves and the Competitiveness of Markets p. 199
Close-up: How Big is Big Industry? p. 200
Economies of Scope p. 201
Review and Practice p. 202
Appendix Cost Minimization with Many Inputs p. 204
Chapter 11 Production p. 210
Revenue p. 211
Costs p. 211
Basic Conditions of Competitive Supply p. 213
Entry, Exit, and Market Supply p. 215
Close-up: Entering the Painting Business p. 216
Long-run Versus Short-run Supply p. 219
Accounting Profits and Economic Profits p. 222
Close-up: Sunk Costs, Contestability, and the Channel Tunnel p. 224
Factor Demand p. 225
Close-up: The Fall and Rise of the Railways p. 229
Review and Practice p. 230
Appendix Alternative Ways of Calculating the Demand for Labour p. 232
Chapter 12 Competitive Equilibrium p. 233
General Equilibrium Analysis p. 234
The Basic Competitive Equilibrium Model p. 236
The Circular Flow of Funds p. 238
Competitive General Equilibrium and Economic Efficiency p. 240
Close-up: Pareto Improvement in the Skies p. 242
Looking Beyond the Basic Model: Market Failures and the Role of Government p. 243
Review and Practice p. 245
Appendix Pareto Efficiency and Competitive Markets p. 246
Part 3 Imperfect Markets
Chapter 13 Monopolies and Imperfect Competition p. 249
Market Structures p. 250
Monopoly Output p. 251
Close-up: The Soviet Legacy of Monopoly Power p. 257
Imperfect Competition p. 258
Close-up: Is Xerox the Same as Photocopy? p. 261
Barriers to Entry: Why is Competition Limited? p. 262
Equilibrium with Monopolistic Competition p. 266
Schumpeterian Competition p. 267
Close-up: IBM--From the Edge of Monopoly to the Edge of Competition p. 268
Review and Practice p. 268
Appendix A Monopsony p. 270
Appendix B Demand for Inputs Under Monopoly and Imperfect Competition p. 270
Chapter 14 Oligopolies p. 272
Collusion p. 273
Game Theory: The Prisoner’s Dilemma p. 276
Restrictive Practices p. 277
The Many Dimensions of Competition Among Oligopolists p. 279
Price and Output Competition p. 279
Close-up: Off Their Trolleys--The British and Supermarkets p. 280
Review and Practice p. 282
Appendix Describing the Market Equilibrium for Oligopoly p. 284
Chapter 15 Government Policies Towards Competition p. 287
The Drawbacks of Monopolies and Limited Competition p. 288
Policies Towards Natural Monopolies p. 291
Government Policies p.

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About the author (1993)

Joseph Stiglitz is professor of economics at Columbia University.

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