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ISBN-10 ‏ : ‎ 0134069609
ISBN-13 ‏ : ‎ 978-0134069609
Author: Karl Case (Author), Ray Fair (Author), Sharon Oster (Author)

For the one-semester course in Principles of Microeconomics. An Introduction to the Functioning of the Economy and the Power and Breadth of Economics Reviewers tell us that Case/Fair/Oster is one of the all-time bestselling Principles of Economics texts because they trust it to be clear, thorough, and complete. Readers of Principles of Microeconomics, Twelfth Edition come away with a basic understanding of how market economies function, an appreciation for the things they do well, and a sense of things they do poorly. With the latest research and added exercises, readers begin to learn the art and science of economic thinking and start to look at some policy and even personal decisions in a different way. Also Available with MyEconLab® This title is available with MyEconLab–an online homework, tutorial, and assessment program designed to work with this text to engage students and improve results. Within its structured environment, students practice what they learn, test their understanding, and pursue a personalized study plan that helps them better absorb course material and understand difficult concepts.

Table of Content:

Part I Introduction to Economics
1 The Scope and Method of Economics
Chapter Outline and Learning Objectives
Why Study Economics?
To Learn a Way of Thinking
Opportunity Cost
Marginalism
Efficient Markets—No Free Lunch
To Understand Society
To Be an Informed Citizen
The Scope of Economics
Microeconomics and Macroeconomics
The Diverse Fields of Economics
The Method of Economics
Theories and Models
All Else Equal
Expressing Models in Words, Graphs, and Equations
Cautions and Pitfalls
What Is Really Causal?
Testing Theories and Models: Empirical Economics
Economic Policy
Efficiency
Equity
Growth
Stability
An Invitation
Summary
1.1 Why Study Economics?
1.2 The Scope of Economics
3 The Method of Economics
Review Terms and Concepts
Problems
1.1 Why Study Economics
Learning Objective:
1.2 The Scope of Economics
Learning Objective:
1.3 The Method of Economics
Learning Objective:
Chapter 1 Appendix: How to Read and Understand Graphs
Time Series Graphs
Graphing Two Variables
Plotting Income and Consumption Data for Households
Slope
Some Precautions
Appendix Summary
Appendix Review Terms And Concepts
Appendix Problems
CHAPTER 1 APPENDIX : How to Read and Understand Graphs
Learning Objective:
2 The Economic Problem: Scarcity and Choice
Chapter Outline and Learning Objectives
Scarcity, Choice, and Opportunity Cost
Scarcity and Choice in a One-Person Economy
Opportunity Cost
Scarcity and Choice in an Economy of Two or More
Specialization, Exchange, and Comparative Advantage
A Graphical Presentation of the Production Possibilities and Gains from Specialization
Weighing Present and Expected Future Costs and Benefits
Capital Goods and Consumer Goods
The Production Possibility Frontier
Negative Slope and Opportunity Cost
The Law of Increasing Opportunity Cost
Unemployment
Inefficiency
The Efficient Mix of Output
Economic Growth
Sources of Growth and the Dilemma of Poor Countries
The Economic Problem
Economic Systems and the Role of Government
Command Economies
Laissez-Faire Economies: The Free Market
Consumer Sovereignty
Individual Production Decisions: Free Enterprise
Distribution of Output
Price Theory
Mixed Systems, Markets, and Governments
Looking Ahead
Summary
2.1 Scarcity, Choice, and Opportunity Cost
2.2 Economic Systems and The Role of Government
Review Terms and Concepts
Problems
2.1 Scarcity, Choice, and Opportunity Cost
Learning Objective:
2.2 Economic Systems and the Role of Government
Learning Objective:
3 Demand, Supply, and Market Equilibrium
Chapter Outline and Learning Objectives
Firms and Households: The Basic Decision-Making Units
Input Markets and Output Markets: The Circular Flow
Demand in Product/Output Markets
Changes in Quantity Demanded versus Changes in Demand
Price and Quantity Demanded: The Law of Demand
Demand Curves Slope Downward
Other Properties of Demand Curves
Other Determinants of Household Demand
Income and Wealth
Prices of Other Goods and Services
Tastes and Preferences
Expectations
Shift of Demand versus Movement along a Demand Curve
From Household Demand to Market Demand
Supply in Product/Output Markets
Price and Quantity Supplied: The Law of Supply
Other Determinants of Supply
The Cost of Production
The Prices of Related Products
Shift of Supply versus Movement along a Supply Curve
From Individual Supply to Market Supply
Market Equilibrium
Excess Demand
Excess Supply
Changes in Equilibrium
Demand and Supply in Product Markets: A Review
Looking Ahead: Markets and the Allocation of Resources
Summary
3.1 Firms and Households: The Basic Decision-Making Units
3.2 Input Markets and Output Markets: The Circular Flow
3.3 Demand in Product/Output Markets
3.4 Supply in Product/Output Markets
3.5 Market Equilibrium
Review Terms and Concepts
Problems
3.1 Firms and Households: The Basic Decision-Making Units
Learning Objective:
3.2 Input Markets and Output Markets: The Circular Flow
Learning Objective:
3.3 Demand in Product/ Output Markets
Learning Objective:
3.4 Supply in Product/Output Markets
Learning Objective:
3.5 Market Equilibrium
Learning Objective:
4 Demand and Supply Applications
Chapter Outline and Learning Objectives
The Price System: Rationing and Allocating Resources
Price Rationing
Constraints on the Market and Alternative Rationing Mechanisms
Oil, Gasoline, and OPEC
Rationing Mechanisms for Concert and Sports Tickets
Prices and the Allocation of Resources
Price Floor
Supply and Demand Analysis: An Oil Import Fee
Supply and Demand and Market Efficiency
Consumer Surplus
Producer Surplus
Competitive Markets Maximize the Sum of Producer and Consumer Surplus
Potential Causes of Deadweight Loss From Under- and Overproduction
Looking Ahead
Summary
4.1 The Price System: Rationing And Allocating Resources
4.2 Supply and Demand Analysis: An Oil Import Fee
4.3 Supply and Demand and Market Efficiency
Review Terms and Concepts
Problems
4.1 The Price System: Rationing and Allocating Resources
Learning Objective:
4.2 Supply and Demand Analysis: An Oil Import Fee
Learning Objective:
4.3 Supply and Demand and Market Efficiency
Learning Objective:
5 Elasticity
Chapter Outline and Learning Objectives
Price Elasticity of Demand
Slope and Elasticity
Types of Elasticity
Calculating Elasticities
Calculating Percentage Changes
Elasticity Is a Ratio of Percentages
The Midpoint Formula
Point Elasticity
Elasticity Changes along a Straight-Line Demand Curve
Elasticity and Total Revenue
The Determinants of Demand Elasticity
Availability of Substitutes
The Importance of Being Unimportant
Luxuries versus Necessities
The Time Dimension
Other Important Elasticities
Income Elasticity of Demand
Cross-Price Elasticity of Demand
Elasticity of Supply
What Happens When We Raise Taxes: Using Elasticity
Looking Ahead
Summary
5.1 Price Elasticity of Demand
5.2 Calculating Elasticities
5.3 The Determinants of Demand Elasticity
5.4 Other Important Elasticities
5.5 What Happens When We Raise Taxes: Using Elasticity
Review Terms and Concepts
Problems
5.1 Price Elasticity of Demand
Learning Objective:
5.2 Calculating Elasticities
Learning Objective:
5.3 The Determinants of Demand Elasticity
Learning Objective:
5.4 Other Important Elasticities
Learning Objective:
5.5 What Happens When We Raise Taxes: Using Elasticity
Learning Objective:
Part II The Market System
6 Household Behavior and Consumer Choice
Chapter Outline and Learning Objectives
Household Choice in Output Markets
The Determinants of Household Demand
The Budget Constraint
Preferences, Tastes, Trade-Offs, and Opportunity Cost
The Budget Constraint More Formally
The Equation of the Budget Constraint
Budget Constraints Change When Prices Rise or Fall
The Basis of Choice: Utility
Diminishing Marginal Utility
Allocating Income to Maximize Utility
The Utility-Maximizing Rule
Diminishing Marginal Utility and Downward-Sloping Demand
Income and Substitution Effects
The Income Effect
The Substitution Effect
Household Choice in Input Markets
The Labor Supply Decision
The Price of Leisure
Income and Substitution Effects of a Wage Change
Saving and Borrowing: Present versus Future Consumption
A Review : Households in Output and Input Markets
Summary
6.1 Household Choice In Output Markets
6.2 The Basis of Choice: Utility
6.3 Income and Substitution Effects
6.4 Household Choice In Input Markets
Review Terms and Concepts
Problems
6.1 Household Choice in Output Markets
Learning Objective:
6.2 The Basis of Choice: Utility
Learning Objective:
6.3 Income and Substitution Effects
Learning Objective:
6.4 Household Choice in Input Markets
Learning Objective:
Chapter 6 Appendix: Indifference Curves
Learning Objective
Assumptions
Deriving Indifference Curves
Properties of Indifference Curves
Consumer Choice
Deriving a Demand Curve from Indifference Curves and Budget Constraints
Appendix Summary
Appendix Review Terms and Concepts
Appendix Problems
Appendix 6A: Indifference Curves
Learning Objective:
7 The Production Process: The Behavior of Profit-Maximizing Firms
Chapter Outline and Learning Objectives
The Behavior of Profit-Maximizing Firms
Profits and Economic Costs
Normal Rate of Return
Short-Run versus Long-Run Decisions
The Bases of Decisions: Market Price of Outputs, Available Technology, and Input Prices
The Production Process
Production Functions: Total Product, Marginal Product, and Average Product
Marginal Product and the Law of Diminishing Returns
Marginal Product versus Average Product
Production Functions with Two Variable Factors of Production
Choice of Technology
Looking Ahead: Cost and Supply
Summary
7.1 The Behavior of Profit-Maximizing Firms
7.2 The Production Process
7.3 Choice of Technology
Review Terms and Concepts
Problems
7.1 The Behavior of Profit-Maximizing Firms
Learning Objective:
7.2 The Production Process
Learning Objective:
7.3 Choice of Technology
Learning Objective:
Chapter 7 Appendix: Isoquants and Isocosts
Learning Objective
New Look at Technology: Isoquants
Factor Prices and Input Combinations: Isocosts
MyEconLab
Finding the Least-Cost Technology with Isoquants and Isocosts
The Cost-Minimizing Equilibrium Condition
Appendix Summary
Appendix Review Terms and Concepts
Appendix Problems
Appendix 7A: Isoquants and Isocosts
8 Short-Run Costs and Output Decisions
Chapter Outline and Learning Objectives
Costs in the Short Run
Fixed Costs
Total Fixed Cost (TFC)
Average Fixed Cost (AFC)
Variable Costs
Total Variable Cost (TVC)
Marginal Cost (MC)
The Shape of the Marginal Cost Curve in the Short Run
Graphing Total Variable Costs and Marginal Costs
Average Variable Cost (AVC)
Graphing Average Variable Costs and Marginal Costs
Total Costs
Average Total Cost (ATC)
The Relationship between Average Total Cost and Marginal Cost
Short-Run Costs: A Review
Output Decisions: Revenues, Costs, and Profit Maximization
Perfect Competition
Total Revenue and Marginal Revenue
Comparing Costs and Revenues to Maximize Profit
The Profit-Maximizing Level of Output
A Numerical Example
The Short-Run Supply Curve
Looking Ahead
Summary
8.1 Costs In The Short Run
8.2 Output Decisions: Revenues, Costs, and Profit Maximization
Review Terms and Concepts
Problems
8.1 Costs in the Short Run
Learning Objective:
8.2 Output Decisions: Revenues, Costs, and Profit Maximization
9 Long-Run Costs and Output Decisions
Short-Run Conditions and Long-Run Directions
Maximizing Profits
Example: The Blue Velvet Car Wash
Graphic Presentation
Minimizing Losses
Producing at a Loss to Offset Fixed Costs
The Short-Run Industry Supply Curve
Long-Run Directions: A Review
Long-Run Costs: Economies and Diseconomies of Scale
9.2 Learning Objective
Increasing Returns to Scale
The Sources of Economies of Scale
Constant Returns to Scale
Diseconomies of Scale
U-Shaped Long-Run Average Costs
Long-Run Adjustments to Short-Run Conditions
Short-Run Profits: Moves In and Out of Equilibrium
The Long-Run Adjustment Mechanism: Investment Flows Toward Profit Opportunities
Output Markets: A Final Word
Summary
9.1 Short-Run Conditions and Long-Run Directions
9.2 Long-Run Costs: Economies and Diseconomies of Scale
9.3 Long-Run Adjustments to Short-Run Conditions
Review Terms and Concepts
Problems
9.1 Short-Run Conditions and Long-Run Directions
Learning Objective:
9.2 Long-Run Costs: Economies and Diseconomies of Scale
Learning Objective:
9.3 Long-Run Adjustments to Short-Run Conditions
Learning Objective:
Chapter 9 Appendix
External Economies and Diseconomies
Learning Objective
The Long-Run Industry Supply Curve
Appendix Summary
External Economies And Diseconomies p. 204
The Long-Run Industry Supply Curve p. 205
Appendix Review Terms and Concepts
Appendix Problems
Appendix 9A: External Economies and Diseconomies and the Long-Run Industry Supply Curve
Learning Objective:
10 Input Demand: The Labor and Land Markets
Chapter Outline and Learning Objectives
Input Markets: Basic Concepts
Demand for Inputs: A Derived Demand
Marginal Revenue Product
Labor Supply
Labor Markets
The Firm’s Labor Market Decision
Comparing Marginal Revenue and Marginal Cost to Maximize Profits
Many Labor Markets
Land Markets
Rent and the Value of Output Produced on Land
Input Demand Curves
Shifts in Factor Demand Curves
The Demand for Outputs
The Quantity of Complementary and Substitutable Inputs
The Prices of Other Inputs
Technological Change
Profit-Maximizing Condition in Input Markets
Looking Ahead
Summary
10.1 Input Markets: Basic Concepts
10.2 Labor Markets
10.3 Land Markets
10.4 Input Demand Curves
10.5 The Firm’s Profit-Maximizing Condition In Input Markets
Review Terms and Concepts
Problems
10.1 Input Markets: Basic Concepts
Learning Objective:
10.2 Labor Markets
Learning Objective:
10.3 Land Markets
Learning Objective:
10.4 Input Demand Curves
Learning Objective:
10.5 The Firm’s Profit-Maximizing Condition in Input Markets
Learning Objective:
11 Input Demand: The Capital Market and the Investment Decision
Chapter Outline and Learning Objectives
Capital, Investment, and Depreciation
Capital
Tangible Capital
Social Capital: Infrastructure
Intangible Capital
Measuring Capital
Investment and Depreciation
The Capital Market
Capital Income: Interest and Profits
Interest
Profits
Functions of Interest and Profit
Financial Markets in Action
Case A: Business Loans
Case B: Venture Capital
Case C: Retained Earnings
Case D: The Stock Market
Mortgages and the Mortgage Market
Capital Accumulation and Allocation
The Demand for New Capital and the Investment Decision
Forming Expectations
The Expected Benefits of Investments
The Expected Costs of Investments
Comparing Costs and Expected Return
The Expected Rate of Return and the Marginal Revenue Product of Capital
A Final Word on Capital
Summary
11.1 Capital, Investment, and Depreciation
11.2 The Capital Market
11. 3 The Demand For New Capital and The Investment Decision
Review Terms and Concepts
Problems
11.1 Capital, Investment, and Depreciation
Learning Objective:
11.2 The Capital Market
Learning Objective:
11.3 The Demand for New Capital and the Investment Decision
Learning Objective:
12 General Equilibrium and the Efficiency of Perfect Competition
Chapter Outline and Learning Objectives
Market Adjustment to Changes in Demand
Allocative Efficiency and Competitive Equilibrium
Pareto Efficiency
Example: Budget Cuts in Massachusetts
The Efficiency of Perfect Competition
Efficient Allocation of Resources Among Firms
Efficient Distribution of Outputs Among Households
Producing What People Want: The Efficient Mix of Output
Perfect Competition versus Real Markets
The Sources of Market Failure
Imperfect Competition
Public Goods
Externalities
Imperfect Information
Evaluating the Market Mechanism
Summary
12.1 Market Adjustment To Changes In Demand
12.2 Allocative Efficiency and Competitive Equilibrium
12.3 The Sources of Market Failure
12.4 Evaluating The Market Mechanism
Review Terms and Concepts
Problems
12.1 Market Adjustments to Changes in Demand
Learning Objective:
12.2 Allocative Efficiency and Competitive Equilibrium
Learning Objective:
12.3 The Sources of Market Failure
Learning Objective:
Part III Market Imperfections and the Role of Government
13 Monopoly and Antitrust Policy
Chapter Outline and Learning Objectives
Imperfect Competition and Market Power: Core Concepts
Forms of Imperfect Competition and Market Boundaries
Price and Output Decisions in Pure Monopoly Markets
Demand in Monopoly Markets
Marginal Revenue and Market Demand
The Monopolist’s Profit-Maximizing Price and Output
The Absence of a Supply Curve in Monopoly
Perfect Competition and Monopoly Compared
Monopoly in the Long Run: Barriers to Entry
Economies of Scale
Patents
Government Rules
Ownership of a Scarce Factor of Production
Network Effects
The Social Costs of Monopoly
Inefficiency and Consumer Loss
Rent-Seeking Behavior
Price Discrimination
Examples of Price Discrimination
Remedies for Monopoly: Antitrust Policy
Major Antitrust Legislation
The Sherman Act of 1890
The Clayton Act and the Federal Trade Commission, 1914
Imperfect Markets: A Review and a Look Ahead
Summary
13.1 Imperfect Competition and Market Power: Core Concepts
13.2 Price and Output Decisions in Pure Monopoly Markets
13.3 The Social Costs of Monopoly
13.4 Price Discrimination
13.5 Remedies for Monopoly: Antitrust Policy
Review Terms and Concepts
Problems
13.1 Imperfect Competition and Market Power: Core Concepts
Learning Objective:
13.2 Price and Output Decisions in Pure Monopoly Markets
Learning Objective:
13.3 The Social Costs of Monopoly
Learning Objective:
13.4 Price Discrimination
Learning Objective:
13.5 Remedies for Monopoly: Antitrust Policy
Learning Objective:
14 Oligopoly
Chapter Outline and Learning Objectives
Market Structure in an Oligopoly
Oligopoly Models
Learning Objective
The Collusion Model
The Price-Leadership Model
The Cournot Model
Game Theory
Learning Objective
Repeated Games
A Game with Many Players: Collective Action Can Be Blocked by a Prisoner’s Dilemma
Oligopoly and Economic Performance
4 Learning Objective
Industrial Concentration and Technological Change
The Role of Government
5 Learning Objective
Regulation of Mergers
A Proper Role for Government?
Summary
14.1 Market Structure in an Oligopoly
14.2 Oligopoly Models
14.3 Game Theory
14.4 Oligopoly and Economic Performance
14.5 The Role of Government
Review Terms and Concepts
Problems
14.1 Market Structure in an Oligopoly
Learning Objective:
14.2 Oligopoly Models
Learning Objective:
14.3 Game Theory
Learning Objective:
14.4 Oligopoly and Economic Performance
Learning Objective:
14.5 The Role of Government
Learning Objective:
15 Monopolistic Competition
Chapter Outline and Learning Objectives
Industry Characteristics
Product Differentiation and Advertising
How Many Varieties?
How Do Firms Differentiate Products?
Advertising
The Case for Advertising
The Case against Product Differentiation and Advertising
Open Questions
Price and Output Determination in Monopolistic Competition
Product Differentiation and Demand Elasticity
Price/Output Determination in the Short Run
Price/Output Determination in the Long Run
Economic Efficiency and Resource Allocation
Summary
15.1 Industry Characteristics
15.2 Product Differentiation and Advertising
15.3 Price and Output Determination in Monopolistic Competition
15.4 Economic Efficiency and Rescource Allocation
Review Terms and Concepts
Problems
15.1 Industry Characteristics
Learning Objective:
15.2 Product Differentiation and Advertising
Learning Objective:
15.3 Price and Output Determination in Monopolistic Competition
Learning Objective:
15.4 Economic Efficiency and Resource Allocation
Learning Objective:
16 Externalities, Public Goods, and Common Resources
Chapter Outline and Learning Objectives
Externalities and Environmental Economics
Marginal Social Cost and Marginal Cost Pricing
Acid Rain and the Clean Air Act
Other Externalities
Some Examples of Positive Externalities
Costs and Benefits of Pollution
Internalizing Externalities
Private Bargaining and Negotiation
Environmental Standards
Taxes and Subsidies
Measuring Social Costs
Subsidizing External Benefits
Tradeable Emissions Permits: Selling or Auctioning Pollution Rights
Public (Social) Goods
The Characteristics of Public Goods
Public Provision of Public Goods
Optimal Provision of Public Goods
The Samuelson–Musgrave Theory
The Problems of Optimal Provision
Local Provision of Public Goods: Tiebout Hypothesis
Common Resources
Summary
16.1 Externalities and Environmental Economics
16.2 Public (Social) Goods
16.3 Common Resources
Review Terms and Concepts
Problems
16.1 Externalities and Environmental Economics
Learning Objective:
16.2 Public (Social) Goods
Learning Objective:
16.3 Common Resources
Learning Objective:
17 Uncertainty and Asymmetric Information
Chapter Outline and Learning Objectives
Decision Making Under Uncertainty: The Tools
Expected Value
Expected Utility
Attitudes Toward Risk
Asymmetric Information
Adverse Selection
Adverse Selection and Lemons
Adverse Selection and Insurance
Reducing Adverse Selection Problems
Market Signaling
Moral Hazard
Incentives
Labor Market Incentives
Summary
17.1 Decision Making Under Uncertainty: The Tools
17.2 Asymmetric Information
17.3 Incentives
Review Terms and Concepts
Problems
17.1 Decision Making Under Uncertainty: The Tools
Learning Objective:
17.2 Asymmetric Information
Learning Objective:
17.3 Incentives
Learning Objective:
18 Income Distribution and Poverty
Chapter Outline and Learning Objectives
The Sources of Household Income
Wages and Salaries
Income from Property
Income from the Government: Transfer Payments
The Distribution of Market Income
Income Inequality in the United States
Changes in the Distribution of Income
The Lorenz Curve and the Gini Coefficient
Causes of Inequality in Market Income
Inequality in Wage Income
Required Skills and Human Capital
Compensating Differentials
Discrimination
Household Composition
Inequality in Property Income
Arguments for and Against Reducing Market-Income Inequality
Arguments Against Redistribution
Arguments in Favor of Redistribution
Social Obligations
Utilitarian Justice
Social Contract Theory—Rawlsian Justice
Redistribution of Income Through Taxes and Transfers
The Tax System
Income Taxes
The Earned Income Tax Credit (EITC)
The Transfer System
Social Security
Temporary Assistance to Needy Families (TANF)
Unemployment Compensation
Health Care: Medicaid and Medicare
Supplemental Nutrition Assistance Program (SNAP)
Housing Programs
Redistribution Effects of Taxes and Transfers in 2011
Change in U.S. Inequality Over Time: 1979–2011
Poverty
The Minimum Wage
The Distribution of Wealth
Income Inequality in Other Countries
Government or the Market? A Review
Summary
18.1 The Sources of Household Income
18.2 The Distribution of MARKET Income
18.3 Causes of Inequality In Market Income
18.4 Arguments for and Against Reducing Market-Income Inequality
18.5 Redistribution of Income Through Taxes and Transfers
18.6 Poverty
18.7 The Minimum Wage
18.8 The Distribution of Wealth
18.9 Income Inequality in Other Countries
Review Terms and Concepts
Problems
18.1 The Sources of Household Income
Learning Objective:
18.2 The Distribution of Market Income
Learning Objective:
18.3 Causes of Inequality in Market Income
Learning Objective:
18.4 Arguments For and Against Reducing Market-Income Inequality
Learning Objective:
18.5 Redistribution of Income Through Taxes and Transfers
Learning Objective:
18.6 Poverty
Learning Objective:
18.7 The Minimum Wage
Learning Objective:
18.8 The Distribution of Wealth
Learning Objective:
18.9 Income Inequality in Other Countries
Learning Objective:
19 Public Finance: The Economics of Taxation
Chapter Outline and Learning Objectives
The Basics of Taxation
Taxes: Basic Concepts
Taxes on Stocks versus Taxes on Flows
Proportional, Progressive, and Regressive Taxes
Marginal versus Average Tax Rates
How Much Does a Deduction Save You in Taxes?
Tax Incidence: Who Pays?
The Incidence of Payroll Taxes
Labor Supply and Labor Demand Curves in Perfect Competition: A Review
Imposing a Payroll Tax: Who Pays?
The Incidence of Corporate Profits Taxes
The Burden of the Corporate Tax
The Overall Incidence of Taxes in the United States: Empirical Evidence
Excess Burdens and the Principle of Neutrality
Measuring Excess Burdens
Excess Burdens and the Degree of Distortion
The Principle of Second Best
Optimal Taxation
Tax Equity
What Is the “Best” Tax Base?
Income versus Consumption as the Best Tax Base
Wealth as the Best Tax Base
No Simple Answer
Social Choice
The Voting Paradox
Government Inefficiency: Theory of Public Choice
Rent-Seeking Revisited
Summary
19.1 The Basics of Taxation
19.2 Tax Incidence: Who Pays?
19.3 Excess Burdens and the Principle of Neutrality
19.4 The Principle of Second Best
19.5 Tax Equity
19.6 Social Choice
Review Terms and Concepts
Problems
19.1 The Basics of Taxation
Learning Objective:
19.2 Tax Incidence: Who Pays?
Learning Objective:
19.3 Excess Burdens and the Principle of Neutrality
Learning Objective:
19.4 The Principle of Second Best
Learning Objective:
19.5 Tax Equity
Learning Objective:
19.6 Social Choice
Learning Objective:
Part IV The World Economy
20 International Trade, Comparative Advantage, and Protectionism
Chapter Outline and Learning Objectives
Trade Surpluses and Deficits
The Economic Basis for Trade: Comparative Advantage
Absolute Advantage versus Comparative Advantage
Gains from Mutual Absolute Advantage
Gains from Comparative Advantage
Why Does Ricardo’s Plan Work?
Terms of Trade
Exchange Rates
Trade and Exchange Rates in a Two-Country/Two-Good World
Exchange Rates and Comparative Advantage
The Sources of Comparative Advantage
The Heckscher-Ohlin Theorem
Other Explanations for Observed Trade Flows
Trade Barriers: Tariffs, Export Subsidies, and Quotas
U.S. Trade Policies, GATT, and the WTO
Economic Integration
Free Trade or Protection?
The Case for Free Trade
The Case for Protection
Protection Saves Jobs
Some Countries Engage in Unfair Trade Practices
Cheap Foreign Labor Makes Competition Unfair
Protection Safeguards National Security
Protection Discourages Dependency
Environmental Concerns
Protection Safeguards Infant Industries
An Economic Consensus
Summary
20.1 Trade Surpluses and Deficits
20.2 The Economic Basis for Trade: Comparative Advantage
20.3 The Sources of Comparative Advantage
20.4 Trade Barriers: Tariffs, Export Subsidies, and Quotas
20.5 Free Trade or Protection?
Review Terms and Concepts
Problems
20.1 Trade Surpluses and Deficits
Learning Objective:
20.2 The Economic Basis for Trade: Comparative Advantage
Learning Objective:
20.3 The Sources of Comparative Advantage
Learning Objective:
20.4 Trade Barriers: Tariffs, Export Subsidies, and Quotas
Learning Objective:
20.5 Free Trade or Protection?
Learning Objective:
21 Economic Growth in Developing Economies
Chapter Outline and learning objectives
Life in the Developing Nations: Population and Poverty
Economic Development: Sources and Strategies
The Sources of Economic Development
Capital Formation
Human Resources and Entrepreneurial Ability
Infrastructure Capital
Strategies for Economic Development
The Role of Government
The Movement from Agriculture to Industry
Exports or Import Substitution?
Microfinance
Two Examples of Development: China and India
Development Interventions
Random and Natural Experiments: Some New Techniques in Economic Development
Education Ideas
Health Improvements
Summary
21.1 Life in the Developing Nations: Population and Poverty
21.2 Economic Development: Sources and Strategies
21.3 Development Interventions
Review Terms and Concepts
Problems
21.1 Life in the Developing Nations: Population and Poverty
Learning Objective:
21.2 Economic Development: Sources and Strategies
Learning Objective:
21.3 Development Interventions
Learning Objective:
Part V Methodology
22 Critical Thinking about Research
Chapter Outline and learning objectives
Selection Bias
Causality
Correlation versus Causation
Random Experiments
Regression Discontinuity
Difference-in-Differences
Statistical Significance
Regression Analysis
Summary
22.1 Selection Bias
22.2 Causality
22.3 Statistical Significance
22.4 Regression Analysis
Review Terms and Concepts
Problems
22.1 Selection Bias
Learning Objective:
22.2 Causality
Learning Objective:
22.3 Statistical Significance
Learning Objective:
22.4 Regression Analysis
Learning Objective:
Glossary
Index
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
U
V
W
X
Y
Z
Photo Credits