Economics: Theory Through Applications
v. 1.0
Table of Contents
Licensing Information
Preface
Chapter 1: What Is Economics?
Microeconomics in a Fast-Food Restaurant
Macroeconomics in a Fast-Food Restaurant
What Is Economics, Really?
End-of-Chapter Material
Chapter 2: Microeconomics in Action
Four Examples of Microeconomics
The Microeconomic Approach
End-of-Chapter Material
Chapter 3: Macroeconomics in Action
Chapter Introduction
Behind the Screens
Between News and Policy: The Framework of Macroeconomics
End-of-Chapter Material
Chapter 4: Everyday Decisions
Chapter Introduction
Individual Decision Making: How You Spend Your Income
Individual Demand
Individual Decision Making: How You Spend Your Time
End-of-Chapter Material
Chapter 5: Life Decisions
Chapter Introduction
Consumption and Saving
Using Discounted Present Values
Avoiding Risk
Embracing Risk
End-of-Chapter Material
Chapter 6: eBay and craigslist
Chapter Introduction
craigslist and the Gains from Trade
eBay
Supply and Demand
Production Possibilities
End-of-Chapter Material
Chapter 7: Where Do Prices Come From?
Chapter Introduction
The Goal of a Firm
The Revenues of a Firm
The Costs of a Firm
Markup Pricing: Combining Marginal Revenue and Marginal Cost
The Supply Curve of a Competitive Firm
End-of-Chapter Material
Chapter 8: Why Do Prices Change?
Chapter Introduction
Market Supply and Market Demand
Using the Supply-and-Demand Framework
Another Perspective on Changing Prices
Three Important Markets
Beyond Perfect Competition
End-of-Chapter Material
Appendix: Algebraic Presentation of Supply and Demand
Chapter 9: Growing Jobs
Chapter Introduction
How Do Firms Decide How Many Hours of Labor to Hire?
Entry and Exit
Search
Government Policies
End-of-Chapter Material
Chapter 10: Making and Losing Money on Wall Street
Chapter Introduction
A Walk Down Wall Street
The Value of an Asset
Asset Markets and Asset Prices
Efficient Markets
End-of-Chapter Material
Appendix: A General Formulation of Discounted Present Value
Chapter 11: Raising the Wage Floor
Chapter Introduction
Nominal Wages and Real Wages
The Effects of a Minimum Wage
Minimum Wage Changes
The Minimum Wage and the Distribution of Income
Empirical Evidence on Minimum Wages
End-of-Chapter Material
Chapter 12: Barriers to Trade and the Underground Economy
Chapter Introduction
How the Government Controls What You Buy and Sell
Limits on Trade across Borders
Government and the Labor Market
End-of-Chapter Material
Chapter 13: Superstars
Chapter Introduction
Facts about Inequality
The Sources of Inequality
Distributive Justice
Government Policy
End-of-Chapter Material
Chapter 14: Cleaning Up the Air and Using Up the Oil
Chapter Introduction
The Economics of Clean Air
Externalities
Renewable, Nonrenewable, and Accumulable Resources
End-of-Chapter Material
Appendix: An Example of the Hotelling Rule in Operation
Chapter 15: Busting Up Monopolies
Chapter Introduction
Market Power and Monopoly
Patents and Copyright
Markets with a Small Number of Sellers
End-of-Chapter Material
Chapter 16: A Healthy Economy
Chapter Introduction
Supply and Demand in Health-Care Markets
Health Insurance
Government Policy
End-of-Chapter Material
Chapter 17: Cars
Chapter Introduction
The Demand for Automobiles
Supply of Cars
Market Outcomes in the Automobile Industry
Policy Issues
End-of-Chapter Material
Chapter 18: The State of the Economy
Measuring Economic Activity
Measuring Prices and Inflation
The Circular Flow of Income
The Meaning of Real GDP
End-of-Chapter Material
Chapter 19: The Interconnected Economy
Chapter Introduction
Housing Supply and Demand
Comparative Statics: Changes in the Price of Housing
Three Important Markets
Linkages across Markets
End-of-Chapter Material
Chapter 20: Globalization and Competitiveness
Chapter Introduction
The Production of Real GDP
Labor in the Aggregate Production Function
Physical Capital in the Aggregate Production Function
Other Inputs in the Aggregate Production Function
Accounting for Changes in GDP
Globalization and Competitiveness Revisited
End-of-Chapter Material
Chapter 21: Global Prosperity and Global Poverty
Chapter Introduction
The Single-Person Economy
Four Reasons Why GDP Varies across Countries
The Accumulation of Physical Capital
Balanced Growth
The Role of International Institutions in Promoting Growth
End-of-Chapter Material
Chapter 22: The Great Depression
Chapter Introduction
What Happened during the Great Depression?
The Great Depression: A Decrease in Potential Output?
The Components of GDP during the Great Depression
The Great Depression: A Decrease in Aggregate Spending?
Policy Interventions and the Great Depression
End-of-Chapter Material
Chapter 23: Jobs in the Macroeconomy
Chapter Introduction
Unemployment
Job and Worker Flows
Hours Worked
The Government and the Labor Market
End-of-Chapter Material
Chapter 24: Money: A User’s Guide
Chapter Introduction
What Is Money?
Using Money to Buy Goods and Services
Using Money to Buy Other Monies: Exchange Rates
Using Money to Buy Assets: Interest Rates
End-of-Chapter Material
Chapter 25: Understanding the Fed
Chapter Introduction
Central Banks
The Monetary Transmission Mechanism
Monetary Policy, Prices, and Inflation
Monetary Policy in the Open Economy
The Tools of the Fed
The Fed in Action
End-of-Chapter Material
Chapter 26: Inflations Big and Small
Chapter Introduction
The Quantity Theory of Money
Facts about Inflation and Money Growth
The Causes of Inflation
The Costs of Inflation
Policy Remedies
End-of-Chapter Material
Chapter 27: Income Taxes
Chapter Introduction
Basic Concepts of Taxation
The Kennedy Tax Cut of 1964
Income Taxes and Saving
The Reagan Tax Cut
End-of-Chapter Material
Chapter 28: Social Security
Chapter Introduction
Individual and Government Perspectives on Social Security
A Model of Consumption
Social Security in Crisis?
The Benefits and Costs of a Social Security System
Social Security in the Real World
End-of-Chapter Material
Chapter 29: Balancing the Budget
Chapter Introduction
Deficits and Debt
The Causes of Budget Deficits
The Benefits of Deficits
The Costs of Deficits
The Ricardian Perspective
End-of-Chapter Material
Chapter 30: The Global Financial Crisis
Chapter Introduction
The Financial Crisis in the United States
From Financial Crisis to Recession
The Crisis in Europe and the Rest of the World
Currency Crises
End-of-Chapter Material
Chapter 31: Toolkit
Chapter Introduction
Individual Demand
Elasticity
The Labor Market
Choices over Time
Discounted Present Value
The Credit Market
Expected Value
Correcting for Inflation
Supply and Demand
Buyer Surplus and Seller Surplus
Efficiency and Deadweight Loss
Production Possibilities Frontier
Comparative Advantage
Costs of Production
Pricing with Market Power
Comparative Statics
Production Function
Nash Equilibrium
Externalities and Public Goods
Foreign Exchange Market
Growth Rates
Mean and Variance
Correlation and Causality
The Credit (Loan) Market (Macro)
The Fisher Equation: Nominal and Real Interest Rates
The Aggregate Production Function
The Circular Flow of Income
Growth Accounting
The Solow Growth Model
The Aggregate Expenditure Model
Price Adjustment
Consumption and Saving
The Government Budget Constraint
The Life-Cycle Model of Consumption
Aggregate Supply and Aggregate Demand
The IS-LM Model