[Joseph_E._Stiglitz,_Carl_E._Walsh]_Economics(Bookos.org) (1)

Price Floors 93
INTERNET CONNECTION: Flawed Deregulation 94
Alternative Solutions 94
REVIEW AND PRACTICE 96
APPENDIX: Elasticity and Slope 98
CHAPTER 5 THE CONSUMPTION DECISION 101
The Basic Problem of Consumer Choice 101
The Budget Constraint 102
Choosing a Point on the Budget Constraint: Individual
Preferences 104
What Happens to Consumption When Income Changes?
105
CASE IN POINT: The Fate of the BTU Tax 107
INTERNET CONNECTION: What We Consume 109
A Closer Look at the Demand Curve 109
Deriving Demand Curves 110
The Importance of Distinguishing Between Income and
Substitution Effects 111
THINKING LIKE AN ECONOMIST: Incentives,
Income Effects, and Substitution Effects 112
Utility and the Description of Preferences 113
Consumer Surplus 117
Looking Beyond the Basic Model 118
How Well Do the Underlying Assumptions Match Reality?
118
Behavioral Economics 119
REVIEW AND PRACTICE 122
APPENDIX: Indifference Curves and the Consumption
Decision 124
Using Indifference Curves to Illustrate Consumer Choices
124
Indifference Curves and Marginal Rates of Substitution
126
Using Indifference Curves to Illustrate Choices 127
Using Indifference Curves to Derive Demand Curves 128
Substitution and Income Effects 128
CHAPTER 6 THE FIRM’S COSTS 131
Profits, Costs, and Factors of Production 132
Production with One Variable Input 132
Types of Costs and Cost Curves 135
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