Introduction
1.1 What Is Economics, and Why Is It Important?
1.4 How Do We Make Choices?
KEY CONCEPTS AND SUMMARY
KEY TERMS
CRITICAL THINKING QUESTIONS
SOLUTIONS TO SELF-CHECK QUESTIONS
2.2 Supply
KEY TERMS
CRITICAL THINKING QUESTIONS
Introduction to Applications of Demand and Supply
3.1 Changes in Equilibrium Price and Quantity: The Four-Step Process
3.3 Consumer Surplus, Producer Surplus, and Deadweight Loss
KEY TERMS
CRITICAL THINKING QUESTIONS
PROBLEMS
SOLUTIONS TO SELF-CHECK QUESTIONS
Introduction to Elasticity
4.2 Polar Cases of Elasticity and Constant Elasticity
4.3 Elasticity and Pricing
KEY TERMS
KEY CONCEPTS AND SUMMARY
SOLUTIONS TO SELF-CHECK QUESTIONS
5.2 Consumption Choices
CRITICAL THINKING QUESTIONS
REVIEW QUESTIONS
6.2 Production in the Short Run
KEY TERMS
KEY CONCEPTS AND SUMMARY
REVIEW QUESTIONS
CRITICAL THINKING QUESTIONS
PROBLEMS
Introduction to Perfect Competition
7.1 Perfect Competition and Why It Matters
7.2 How Perfectly Competitive Firms Make Output Decisions
CRITICAL THINKING QUESTIONS
SOLUTIONS TO SELF-CHECK QUESTIONS
REVIEW QUESTIONS
9.1 Monopolistic Competition
9.2 Oligopoly
SOLUTIONS TO SELF-CHECK QUESTIONS
Introduction to Monopoly and Antitrust Policy
10.1 Corporate Mergers
10.2 Regulating Anti-competitive Behavior
10.3 Regulating Natural Monopolies
10.4 The Great Deregulation Experiment
KEY CONCEPTS AND SUMMARY
CRITICAL THINKING QUESTIONS
Introduction to Environmental Protection and Negative Externalities
11.1 The Economics of Pollution
11.2 Command-and-Control Regulation
11.5 International Environmental Issues
REVIEW QUESTIONS
PROBLEMS
SOLUTIONS TO SELF-QUESTIONS
12.1 Why the Private Sector Underinvests in Innovation
12.2 How Governments Can Encourage Innovation
KEY TERMS
KEY CONCEPTS AND SUMMARY
REVIEW QUESTIONS
CRITICAL THINKING QUESTIONS
PROBLEMS
Labor Markets and Income
13.1 Demand and Supply at Work in Labor Markets
13.3 Wages and Employment in an Imperfectly Competitive Labor Market
13.4 Market Power on the Supply Side of Labor Markets: Unions
13.5 Bilateral Monopoly
13.6 Employment Discrimination
KEY TERMS
REVIEW QUESTIONS
SOLUTIONS TO SELF-CHECK QUESTIONS
14.3 The Safety Net
14.4 Income Inequality: Measurement and Causes
14.5 Government Policies to Reduce Income Inequality
KEY TERMS
KEY CONCEPTS AND SUMMARY
REVIEW QUESTIONS
CRITICAL THINKING QUESTIONS
PROBLEMS
Introduction to Information, Risk and Insurance
15.2 Insurance and Imperfect Information
KEY TERMS
REVIEW QUESTIONS
FINANCIAL MARKETS
16.1 Demand and Supply in Financial Markets
16.4 How to Accumulate Personal Wealth
KEY TERMS
REVIEW QUESTIONS
CRITICAL THINKING QUESTIONS
PROBLEMS
SOLUTIONS TO SELF-CHECK QUESTIONS
17.1 Voter Participation and Costs of Elections
17.3 Flaws in the Democratic System of Government
KEY TERMS
REVIEW QUESTIONS
CRITICAL THINKING QUESTIONS
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REVIEW QUESTIONS
REVIEW QUESTIONS
Exercise B1
What point is preferred along an indifference curve?
Exercise B2
Why do indifference curves slope down?
Exercise B3
Why are indifference curves steep on the left and flatter on the right?
Exercise B4
How many indifference curves does a person have?
Exercise B5
How can you tell which indifference curves represent higher or lower levels of utility?
Exercise B6
What is a substitution effect?
Exercise B7
What is an income effect?
Exercise B8
Does the “income effect” involve a change in income? Explain.
Exercise B9
Does a change in price have both an income effect and a substitution effect? Does a change in income have both an income effect and a substitution effect?
Exercise B10
Would you expect, in some cases, to see only an income effect or only a substitution effect? Explain.
Exercise B11
Which is larger, the income effect or the substitution effect?