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Introduction
Preface
Chapter 1
1.1 What Is Economics, and Why Is It Important?
1.2 Microeconomics and Macroeconomics
1.3 How Economists Use Theories and Models to Understand Economic Issues
1.4 How Economies Can Be Organized: An Overview of Economic Systems
Introduction to Choice in a World of Scarcity
2.1 How Individuals Make Choices Based on Their Budget Constraint
2.2 The Production Possibilities Frontier and Social Choices
2.3 Confronting Objections to the Economic Approach
Introduction to Demand and Supply
3.1 Demand, Supply, and Equilibrium in Markets for Goods and Services
3.2 Shifts in Demand and Supply for Goods and Services
3.3 Changes in Equilibrium Price and Quantity: The Four-Step Process
3.4 Price Ceilings and Price Floors
3.5 Demand, Supply, and Efficiency
Introduction to Labor and Financial Markets
4.1 Demand and Supply at Work in Labor Markets
4.2 Demand and Supply in Financial Markets
4.3 The Market System as an Efficient Mechanism for Information
Introduction to Elasticity
5.1 Price Elasticity of Demand and Price Elasticity of Supply
5.2 Polar Cases of Elasticity and Constant Elasticity
5.3 Elasticity and Pricing
5.4 Elasticity in Areas Other Than Price
Introduction to Consumer Choices
6.1 Consumption Choices
6.2 How Changes in Income and Prices Affect Consumption Choices
6.3 Labor-Leisure Choices
6.4 Intertemporal Choices in Financial Capital Markets
Introduction to Cost and Industry Structure
7.1 Explicit and Implicit Costs, and Accounting and Economic Profit
7.2 The Structure of Costs in the Short Run
7.3 The Structure of Costs in the Long Run
Introduction to Perfect Competition
8.1 Perfect Competition and Why It Matters
8.2 How Perfectly Competitive Firms Make Output Decisions
8.3 Entry and Exit Decisions in the Long Run
8.4 Efficiency in Perfectly Competitive Markets
Introduction to a Monopoly
9.1 How Monopolies Form: Barriers to Entry
9.2 How a Profit-Maximizing Monopoly Chooses Output and Price
Introduction to Monopolistic Competition and Oligopoly
10.1 Monopolistic Competition
10.2 Oligopoly
Introduction to Monopoly and Antitrust Policy
11.1 Corporate Mergers
11.2 Regulating Anticompetitive Behavior
11.3 Regulating Natural Monopolies
11.4 The Great Deregulation Experiment
Introduction to Environmental Protection and Negative Externalities
12.1 The Economics of Pollution
12.2 Command-and-Control Regulation
12.3 Market-Oriented Environmental Tools
12.4 The Benefits and Costs of U.S. Environmental Laws
12.5 International Environmental Issues
12.6 The Tradeoff between Economic Output and Environmental Protection
Introduction to Positive Externalities and Public Goods
13.1 Why the Private Sector Under Invests in Innovation
13.2 How Governments Can Encourage Innovation
13.3 Public Goods
Introduction to Poverty and Economic Inequality
14.1 Drawing the Poverty Line
14.2 The Poverty Trap
14.3 The Safety Net
14.4 Income Inequality: Measurement and Causes
14.5 Government Policies to Reduce Income Inequality
Introduction to Issues in Labor Markets: Unions, Discrimination, Immigration
15.1 Unions
15.2 Employment Discrimination
15.3 Immigration
Introduction to Information, Risk, and Insurance
16.1 The Problem of Imperfect Information and Asymmetric Information
16.2 Insurance and Imperfect Information
Introduction to Financial Markets
17.1 How Businesses Raise Financial Capital
17.2 How Households Supply Financial Capital
17.3 How to Accumulate Personal Wealth
Introduction to Public Economy
18.1 Voter Participation and Costs of Elections
18.2 Special Interest Politics
18.3 Flaws in the Democratic System of Government
Introduction to the Macroeconomic Perspective
19.1 Measuring the Size of the Economy: Gross Domestic Product
19.2 Adjusting Nominal Values to Real Values
19.3 Tracking Real GDP over Time
19.4 Comparing GDP among Countries
19.5 How Well GDP Measures the Well-Being of Society
Introduction to Economic Growth
20.1 The Relatively Recent Arrival of Economic Growth
20.2 Labor Productivity and Economic Growth
20.3 Components of Economic Growth
20.4 Economic Convergence
Introduction to Unemployment
21.1 How the Unemployment Rate is Defined and Computed
21.2 Patterns of Unemployment
21.3 What Causes Changes in Unemployment over the Short Run
21.4 What Causes Changes in Unemployment over the Long Run
Introduction to Inflation
22.1 Tracking Inflation
22.2 How Changes in the Cost of Living are Measured
22.3 How the U.S. and Other Countries Experience Inflation
22.4 The Confusion Over Inflation
22.5 Indexing and Its Limitations
Introduction to the International Trade and Capital Flows
23.1 Measuring Trade Balances
23.2 Trade Balances in Historical and International Context
23.3 Trade Balances and Flows of Financial Capital
23.4 The National Saving and Investment Identity
23.5 The Pros and Cons of Trade Deficits and Surpluses
23.6 The Difference between Level of Trade and the Trade Balance
Introduction to the Aggregate Demand/Aggregate Supply Model
24.1 Macroeconomic Perspectives on Demand and Supply
24.2 Building a Model of Aggregate Demand and Aggregate Supply
24.3 Shifts in Aggregate Supply
24.4 Shifts in Aggregate Demand
24.5 How the AD/AS Model Incorporates Growth, Unemployment, and Inflation
24.6 Keynes’ Law and Say’s Law in the AD/AS Model
Introduction to the Keynesian Perspective
25.1 Aggregate Demand in Keynesian Analysis
25.2 The Building Blocks of Keynesian Analysis
25.3 The Phillips Curve
25.4 The Keynesian Perspective on Market Forces
Introduction to the Neoclassical Perspective
26.1 The Building Blocks of Neoclassical Analysis
26.2 The Policy Implications of the Neoclassical Perspective
26.3 Balancing Keynesian and Neoclassical Models
Introduction to Money and Banking
27.1 Defining Money by Its Functions
27.2 Measuring Money: Currency, M1, and M2
27.3 The Role of Banks
27.4 How Banks Create Money
Introduction to Monetary Policy and Bank Regulation
28.1 The Federal Reserve Banking System and Central Banks
28.2 Bank Regulation
28.3 How a Central Bank Executes Monetary Policy
28.4 Monetary Policy and Economic Outcomes
28.5 Pitfalls for Monetary Policy
Introduction to Exchange Rates and International Capital Flows
29.1 How the Foreign Exchange Market Works
29.2 Demand and Supply Shifts in Foreign Exchange Markets
29.3 Macroeconomic Effects of Exchange Rates
29.4 Exchange Rate Policies
Introduction to Government Budgets and Fiscal Policy
30.1 Government Spending
30.2 Taxation
30.3 Federal Deficits and the National Debt
30.4 Using Fiscal Policy to Fight Recession, Unemployment, and Inflation
30.5 Automatic Stabilizers
30.6 Practical Problems with Discretionary Fiscal Policy
30.7 The Question of a Balanced Budget
Introduction to the Impacts of Government Borrowing
31.1 How Government Borrowing Affects Investment and the Trade Balance
31.2 Fiscal Policy, Investment, and Economic Growth
31.3 How Government Borrowing Affects Private Saving
31.4 Fiscal Policy and the Trade Balance
Introduction to Macroeconomic Policy around the World
32.1 The Diversity of Countries and Economies across the World
32.2 Improving Countries’ Standards of Living
32.3 Causes of Unemployment around the World
32.4 Causes of Inflation in Various Countries and Regions
32.5 Balance of Trade Concerns
Introduction to International Trade
33.1 Absolute and Comparative Advantage
33.2 What Happens When a Country Has an Absolute Advantage in All Goods
33.3 Intra-industry Trade between Similar Economies
33.4 The Benefits of Reducing Barriers to International Trade
Introduction to Globalization and Protectionism
34.1 Protectionism: An Indirect Subsidy from Consumers to Producers
34.2 International Trade and Its Effects on Jobs, Wages, and Working Conditions
34.3 Arguments in Support of Restricting Imports
34.4 How Trade Policy Is Enacted: Globally, Regionally, and Nationally
34.5 The Tradeoffs of Trade Policy
Appendix
Appendix A: The Use of Mathematics in Principles of Economics
Appendix B: Indifference Curves
Appendix C: Present Discounted Value
Appendix D: The Expenditure-Output Model
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