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Three Important Markets Beyond Perfect Competition End-of-Chapter Material Appendix: Algebraic Presentation of Supply and Demand Growing Jobs How Do Firms Decide How Many Hours of Labor to Hire? Entry and Exit Search Government Policies End-of-Chapter Material Making and Losing Money on Wall Street 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 Raising the Wage Floor 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 Barriers to Trade and the Underground Economy How the Government Controls What You Buy and Sell Limits on Trade across Borders Government and the Labor Market End-of-Chapter Material Superstars Facts about Inequality The Sources of Inequality Distributive Justice Government Policy End-of-Chapter Material Cleaning Up the Air and Using Up the Oil The Economics of Clean Air Externalities Renewable, Nonrenewable, and Accumulable Resources End-of-Chapter Material Appendix: An Example of the Hotelling Rule in Operation Busting Up Monopolies Market Power and Monopoly Patents and Copyright Markets with a Small Number of Sellers End-of-Chapter Material A Healthy Economy Supply and Demand in Health-Care Markets Health Insurance
Government Policy End-of-Chapter Material Cars The Demand for Automobiles Supply of Cars Market Outcomes in the Automobile Industry Policy Issues End-of-Chapter Material Microeconomics Toolkit 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 Percentage Changes and Growth Rates Mean and Variance Correlation and Causality About the Authors Russell Cooper Dr. Russell Cooper is a professor of economics at the European University Institute in Florence, Italy. He has held positions at the University of Texas, Boston University, the University of Iowa, and Yale University as well as numerous visiting positions in Asia, Europe, North America, and South America. He has taught principles of economics at many of these universities as well as numerous courses to PhD students. Cooper’s research has focused on macroeconomics, labor economics, monetary policy, and industrial organization. He received his PhD from the University of Pennsylvania in 1982. He was elected Fellow of the Econometric Society in 1997. A. Andrew John Andrew John is an associate professor of economics at Melbourne Business School, Melbourne, Australia. He received his undergraduate degree in economics from the University of Dublin, Trinity College, in 1981 and his PhD in economics from Yale University in 1988. He has held academic appointments at Michigan State University, the University of Virginia, and INSEAD. He has also held visiting appointments at the University of Michigan, the Helsinki School of Economics and Business Administration, and the University of Texas at Austin. He joined Melbourne Business School in January 2009.
Page 1: This content is copyright Flat Worl
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Page 9 and 10: CHECKING YOUR UNDERSTANDING 1. List
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Page 13 and 14: all the different things you like b
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Page 35 and 36: Figure 3.9 The Demand Curve Table 3
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LEARNING OBJECTIVES 1. What is your
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Figure 4.2 The Budget Line with Two
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The Position of the Budget Line Whe
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Toolkit: Section 17.4 "Choices over
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Saving and Borrowing Your preferred
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Toolkit: Section 17.5 "Discounted P
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Figure 4.8 Individual Loan Supply F
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Similarly, the discounted present v
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are added over one’s lifetime. Se
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years. Cars and kitchen appliances
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Table 4.8 Coin-Flipping Experiment
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Diversification of Risk In many cas
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jobs. The unemployment rate is the
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Figure 4.11 Work Fatalities in the
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Lottery Games Odds Calculator,” a
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EXERCISES 1. Explain why an increas
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Figure 5.1 The eBay Home Page In or
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Road Map The chapter falls naturall
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Figure 5.3 The Buyer’s Valuation
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Figure 5.5 Buyer and Seller Valuati
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1. The seller knows the buyer’s v
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You participate as a buyer in an eB
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transferred from someone who values
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Double Oral Auctions In a double or
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Figure 5.11 Obtaining the Market Su
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Figure 5.13 Supply and Demand When
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Figure 5.15 Surplus in Equilibrium
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Inspired by the craigslist posts th
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Toolkit: Section 17.12 "Production
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Figure 5.20 Hannah’s Production P
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Figure 5.22 Julio and Hannah’s Pr
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frontier has slope −3/2, as Hanna
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EXERCISES 1. Would you expect to ge
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6.1 The Goal of a Firm LEARNING OBJ
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Figure 6.3 The Profits of a Firm We
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Price ($) Quantity 0 100 2 90 4 80
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Figure 6.6 The Elasticity of Demand
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Figure 6.8 Finding the Demand Curve
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Figure 6.10 Revenues Gained and Los
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Figure 6.12 Marginal Revenue and De
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CHECKING YOUR UNDERSTANDING 1. Earl
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Figure 6.15 An Example of a Cost Fu
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Figure 6.17 Setting the Price or Se
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4. If the optimal price is less tha
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6.5 The Supply Curve of a Competiti
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Table 6.5 Costs of Production: Incr
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EXERCISES 1. We suggested that a gr
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Tigers’ Merchandise Off to Roarin
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One way to summarize this behavior
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We typically expect that marginal c
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Figure 7.5 Market Equilibrium In a
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Figure 7.6 A Shift in the Supply Cu
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Comparative Statics The approach th
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the conclusion that the news should
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But this is exactly what happens in
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The example in Table 7.4 "Calculati
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Figure 7.15 Surplus Away from the M
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The demand for credit decreases as
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Toolkit: Section 17.3 "The Labor Ma
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KEY TAKEAWAYS The supply-and-demand
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Figure 7.21 An Increase in Marginal
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KEY TAKEAWAYS Even if markets are n
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The supply-and-demand framework can
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Figure 8.2 Walmart: Growing Jobs? S
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demand in the labor market. In the
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Figure 8.5 The Technology of a Firm
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marginal product of labor. In creat
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Figure 8.8 The Cost Function The co
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We can see from this equation that
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Figure 8.12 The Effect of a Change
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Figure 8.14 The Effect of a Change
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Production" are based on the follow
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Suppose you ask this question just
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Specifically, we can divide entry c
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to a job offer is very important fo
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Another source of bargaining power
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Steven J. Davis, John C. Haltiwange
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EXERCISES 1. A statistic called “
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Road Map This chapter begins with a
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stocks traded in an exchange that s
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The Foreign Exchange Market Further
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Toolkit: Section 17.5 "Discounted P
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Outcome (Number of Oranges) Probabi
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KEY TAKEAWAYS The value of an asset
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The supply side is shown in part (a
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We have also discovered that, in ge
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There are a couple of possible answ
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caution: even if markets are not al
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Figure 9.9 Equilibrium Asset Prices
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EXERCISES 1. List the factors you t
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Burger King in Georgia or Arby’s
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Road Map Because the minimum wage s
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The first increment of the proposal
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wage or the real equilibrium quanti
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Inflation and the Minimum Wage Alth
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In part (a) of Figure 10.9 "Deadwei
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Figure 10.11 The Employment Effect
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To talk about distribution, we need
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Figure 10.14 Effects of an Increase
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LEARNING OBJECTIVES 1. How do econo
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adults.) Figure 10.18 "Teenage Unem
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economists, particularly because th
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EXERCISES 1. List three jobs you th
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some value. In addition, if the mar
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29, 2007, accessed January 29, 2011
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Toolkit: Section 17.11 "Efficiency
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possible to start bringing supplies
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Suppose you want to purchase a book
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In part (a) of Figure 11.9 "Tax Inc
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looked at. Figure 11.12 The Differe
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Figure 11.13 The Production Possibi
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Tariffs Where quotas are the equiva
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unable to migrate, then the equilib
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“Hiding in the Shadows: The Growt
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EXERCISES 1. List three additional
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including taxes on the income peopl
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Figure 12.2 The Lorenz Curve The mo
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Table 12.4 "Gini Coefficient over T
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Measure 1989 Quintile 1994 Quintile
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KEY TAKEAWAYS The Lorenz curve show
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skills, but these are much more com
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Economic forces can mitigate discri
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CHECKING YOUR UNDERSTANDING 1. Draw
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Toolkit: Section 17.6 "The Credit M
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means that the total number of choc
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Incentives Redistribution is more t
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Not all transfers are public; some
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EXERCISES 1. Draw a Lorenz curve fo
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the Cuyahoga River in Ohio was so p
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We will get to Mexico City shortly.
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Social Dilemma Air pollution and se
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the time of other drivers on the ro
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associated with production by a fir
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permits from others. A firm with mo
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egulators simply need to calculate
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In 1999, the United Nations held an
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price of oil will increase. This is
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I am not at all prepared to dismiss
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excludable, then a modified version
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EXERCISES 1. In the example about s
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Busting Up Monopolies Working for A
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Figure 14.1 The Competitive Market
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When a firm is maximizing its profi
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Standard Oil Trust in 1911.Justia.c
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A jury trial led to an award of $4.
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monopoly profits. Notice that a fir
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current prices. This problem is esp
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demand curve. If firm A sets a pric
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Figure 14.7 The Payoffs (Profits) f
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Figure 14.9 The Demand Curve Facing
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Figure 14.12 The Markets for Both F
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authorities are too permissive in a
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EXERCISES 1. Suppose you have two t
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One hundred years ago, our knowledg
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lies further to the left than the s
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Our diet also affects our probabili
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jobs are in service occupations. Th
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Figure 15.4 Payments to Hospitals a
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Toolkit: Section 17.7 "Expected Val
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Adverse Selection One complication
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more than you would if you had to p
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firms to earn a return on this inve
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KEY TAKEAWAYS Government interventi
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EXERCISES 1. Is health insurance a
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delay the purchase of a new car, ch
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(There is a subtlety you may be won
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Figure 16.3 "The Incidence of a Tax
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Figure 16.4 Idealized Effect of Goo
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What was the sticker price of the c
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Pricing is only one of many decisio
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pattern of trade is quite normal: m
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didn’t warn you.” When you see
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United States in 1978 and ultimatel
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Key Links GM: http://www.gm.com/cor
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Chapter 17 Microeconomics Toolkit I
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Figure 17.1 Individual Demand The M
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Figure 17.2 Labor Market Equilibriu
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next year” is $100. The value of
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For example, suppose you are offere
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Chapter 12 "Superstars" Chapter 16
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Chapter 15 "A Healthy Economy" 17.1
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market. Tax incidence is the way in
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Key Insights The production possibi
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Figure 17.11 Cost Measures Figure 1
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Comparative statics is a tool used
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Key Insights The production functio
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The Main Uses of This Tool Chapter
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Key Insights As the exchange rate i
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The concept of correlation is quite
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