Principles of economics:
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Upper Saddle River, NJ u.a.
Pearson/Prentice Hall
2007
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| Edition: | 8. ed. |
| Subjects: | |
| Online Access: | Inhaltsverzeichnis |
| Physical Description: | getr. Zählung Ill., graph. Darst. |
| ISBN: | 0132289148 |
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| 245 | 1 | 0 | |a Principles of economics |c Karl E. Case ; Ray C. Fair |
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Record in the Search Index
| _version_ | 1804136551988330496 |
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| adam_text | Titel: Principles of economics
Autor: Case, Karl E
Jahr: 2007
Contents
Preface xxvii
PART i Introduction to Economics 1
1. The Scope and Method of Economics 1
Why Study Economics? 2
To Learn a Way of Thinking 2
To Understand Society 4
NEWS ANALYSIS Economics and Global Affairs
in 2005 5
To Understand Global Affairs 6
To Be an Informed Voter 6
The Scope of Economics 7
Microeconomics and Macroeconomics 8
The Diverse Fields of Economics 8
FURTHER EXPLORATION The Fields of
Economics 9
The Method of Economics 10
Theories and Models 11
Economic Policy 14
An Invitation 16
SUMMARY 16
REVIEW TERMS AND CONCEPTS 16
PROBLEM SET 17
APPENDIX: HOW TO READ AND UNDERSTAND
GRAPHS 17
2. The Economic Problem: Scarcity
and Choice 25
Scarcity, Choice, and Opportunity Cost 26
Scarcity and Choice in a One-Person Economy 26
NEWS ANALYSIS Opportunity Costs
and Internships 27
Scarcity and Choice in an Economy of Two
or More 28
The Production Possibility Frontier 31
Comparative Advantage and the Gains
from Trade 36
The Economic Problem 39
Economic Systems 39
Command Economies 39
Laissez-Faire Economies: The Free Market 40
Mixed Systems, Markets, and Governments 41
Looking Ahead 42
SUMMARY 42
REVIEW TERMS AND CONCEPTS 43
PROBLEM SET 43
3. Demand, Supply, and Market
Equilibrium 47
Firms and Households: The Basic Decision-Making
Units 48
Input Markets and Output Markets: The Circular
Flow 48
Demand in Product/Output Markets 50
Changes in Quantity Demanded Versus Changes
in Demand 51
Price and Quantity Demanded: The Law of Demand
Other Determinants of Household Demand 54
Shift of Demand versus Movement Along a Demand
Curve 56
From Household Demand to Market Demand 57
Supply in Product/Output Markets 59
Price and Quantity Supplied: The Law of Supply 60
Other Determinants of Supply 61
Shift of Supply versus Movement along a Supply
Curve 62
From Individual Supply to Market Supply 63
Market Equilibrium 64
Excess Demand 65
Excess Supply 66
Changes in Equilibrium 67
Demand and Supply in Product Markets:
A Review 70
Looking Ahead: Markets and the Allocation
of Resources 70
NEWS ANALYSIS Mad Cow Disease Cuts Demand
for Cattle in 2005 71
SUMMARY 72
REVIEW TERMS AND CONCEPTS 73
PROBLEM SET 73
CONTENTS
Demand and Supply Applications 77
The Price System: Rationing and Allocating
Resources 77
Price Rationing 77
Constraints on the Market and Alternative Rationing
Mechanisms 79
NEWS ANALYSIS Hurricane Katrina and Gasoline Prices
in 2005 83
Prices and the Allocation of Resources 84
Price Floors 84
Supply and Demand Analysis: An Oil Import Fee 85
Supply and Demand and Market Efficiency 86
Consumer Surplus 87
Producer Surplus 88
Competitive Markets Maximize the Sum of Producer
and Consumer Surplus 89
Potential Causes of Deadweight Loss
from Under- and Overproduction 89
FURTHER EXPLORATION The Drug Wars: A Matter
of Supply and Demand 90
Looking Ahead 91
SUMMARY 91
REVIEW TERMS AND CONCEPTS 92
PROBLEM SET 92
Elasticity 95
Price Elasticity of Demand 96
Slope and Elasticity 96
Types of Elasticity 97
NEWS ANALYSIS Elasticity of Supply and House
Prices 99
Calculating Elasticities 100
Calculating Percentage Changes 100
Elasticity Is a Ratio of Percentages 101
The Midpoint Formula 101
Elasticity Changes along a Straight-Line Demand
Curve 102
Elasticity and Total Revenue 104
The Determinants of Demand Elasticity 105
Availability of Substitutes 105
The Importance of Being Unimportant 105
FURTHER EXPLORATION London Newspapers
and New York Restaurants Learn about Elasticity 106
The Time Dimension 106
Other Important Elasticities 107
Income Elasticity of Demand 107
Cross-Price Elasticity of Demand 107
Elasticity of Supply 107
Looking Ahead 108
SUMMARY 108
REVIEW TERMS AND CONCEPTS 109
PROBLEM SET 109
APPENDIX: POINT ELASTICITY (OPTIONAL) 110
PART II Foundations of Microeconomics:
Consumers and Firms 113
6. Household Behavior and Consumer
Choice 113
Household Choice in Output Markets 116
The Determinants of Household Demand 116
The Budget Constraint 116
FURTHER EXPLORATION Opportunity Costs-
Then and Now 119
The Equation of the Budget Constraint 120
The Basis of Choice: Utility 122
Diminishing Marginal Utility 122
Allocating Income to Maximize Utility 123
The Utility-Maximizing Rule 125
Diminishing Marginal Utility and Downward-Sloping
Demand 125
Income and Substitution Effects 126
The Income Effect 126
NEWS ANALYSIS Marginal Utility and the Capacity
to Consume 127
The Substitution Effect 128
Consumer Surplus 128
Household Choice in Input Markets 130
The Labor Supply Decision 130
The Price of Leisure 131
Income and Substitution Effects of a Wage Change 131
Saving and Borrowing: Present Versus Future
Consumption 133
A Review: Households in Output and Input
Markets 134
SUMMARY 134
REVIEW TERMS AND CONCEPTS 135
PROBLEM SET 135
APPENDIX: INDIFFERENCE CURVES 137
CONTENTS Xi ii
7. The Production Process: The Behavior
of Profit-Maximizing Firms 143
The Behavior of Profit-Maximizing Firms 146
Profits and Economic Costs 146
NEWS ANALYSIS An Idea, a Firm, and Profits
in 2005 148
Short-Run versus Long-Run Decisions 149
The Bases of Decisions: Market Price of Outputs,
Available Technology, and Input Prices 150
The Production Process 151
Production Functions: Total Product, Marginal Product,
and Average Product 151
Production Functions with Two Variable Factors
of Production 154
Choice of Technology 155
NEWS ANALYSIS Increasing Substitution of Capital
for Labor Raises Labor Productivity 156
Looking Ahead: Cost and Supply 157
SUMMARY 157
REVIEW TERMS AND CONCEPTS 158
PROBLEM SET 158
APPENDIX: ISOQUANTS AND ISOCOSTS 159
8. Short-Run Costs and Output
Decisions 165
Costs in the Short Run 165
Fixed Costs 166
Variable Costs 168
Total Costs 174
Short-Run Costs: A Review 176
Output Decisions: Revenues, Costs, and Profit
Maximization 176
Total Revenue (TR) and Marginal Revenue (MR) 177
Comparing Costs and Revenues to Maximize Profit 178
FURTHER EXPLORATION Case Study in Marginal
Analysis: An Ice Cream Parlor 180
The Short-Run Supply Curve 181
Looking Ahead 182
SUMMARY 183
REVIEW TERMS AND CONCEPTS 183
PROBLEM SET 184
9. Long-Run Costs and Output
Decisions 187
Short-Run Conditions and Long-Run Directions 188
Maximizing Profits 188
Minimizing Losses 190
The Short-Run Industry Supply Curve 192
Long-Run Directions: A Review 194
Long-Run Costs: Economies and Diseconomies
of Scale 194
Increasing Returns to Scale 195
FURTHER EXPLORATION Why Small Farmers
Have Trouble Competing: Economies of Scale
in Agriculture 197
Constant Returns to Scale 197
NEWS ANALYSIS Economies of Scale in Ranking,
2005 198
Decreasing Returns to Scale 199
Long-Run Adjustments to Short-Run
Conditions 200
Short-Run Profits: Expansion to Equilibrium 200
Short-Run Losses: Contraction to Equilibrium 201
The Long-Run Adjustment Mechanism: Investment
Flows Toward Profit Opportunities 202
FURTHER EXPLORATION The Long-Run Average Cost
Curve: Flat or U-Shaped 203
Output Markets: A Final Word 204
SUMMARY 204
REVIEW TERMS AND CONCEPTS 205
PROBLEM SET 205
APPENDIX: EXTERNAL ECONOMIES
AND DISECONOMIES AND THE LONG-RUN
INDUSTRY SUPPLY CURVE 207
10. Input Demand: The Labor and Land
Markets 211
Input Markets: Basic Concepts 211
Demand for Inputs: A Derived Demand 211
Inputs: Complementary and Substitutable 213
Diminishing Returns 213
Marginal Revenue Product 213
Labor Markets 215
A Firm Using Only One Variable Factor of Production:
Labor 215
NEWS ANALYSIS Baseball Salaries and Marginal
Revenue Product in 2005 217
A Firm Employing Two Variable Factors of Production
in the Short and Long Run 219
Many Labor Markets 221
Land Markets 221
Rent and the Value of Output Produced on Land 222
CONTENTS
The Firm s Profit-Maximization Condition in Input
Markets 223
Input Demand Curves 224
Shifts in Factor Demand Curves 224
Resource Allocation and the Mix of Output
in Competitive Markets 225
The Distribution of Income 226
Looking Ahead 226
SUMMARY 226
REVIEW TERMS AND CONCEPTS 227
PROBLEM SET 227
Input Demand: The Capital Market
and the Investment Decision 231
Capital, Investment, and Depreciation 231
Capital 232
Investment and Depreciation 233
The Capital Market 234
Capital Income: Interest and Profits 235
Financial Markets in Action 237
Capital Accumulation and Allocation 238
NEWS ANALYSIS Putting Their Money Where
the Future Is in 2005 239
The Demand for New Capital and the Investment
Decision 240
Forming Expectations 240
Comparing Costs and Expected Return 241
A Final Word on Capital 243
SUMMARY 244
REVIEW TERMS AND CONCEPTS 245
PROBLEM SET 245
APPENDIX: CALCULATING PRESENT VALUE 246
General Etptilibrium and the Efficiency
of Perfect Competition 251
General Equilibrium Analysis 253
An Early Technological Advance: The Electronic
Calculator 253
NEWS ANALYSIS The Dot-Com Bust and the Lahor
Market: 2003 254
Market Adjustment to Changes in Demand 256
Formal Proof of a General Competitive
Equilibrium 258
Allocative Efficiency and Competitive Equilibrium 258
Pareto Efficiency 259
The Efficiency of Perfect Competition 260
Perfect Competition versus Real Markets 263
The Sources of Market Failure 263
Imperfect Markets 263
Public Goods 264
Externalities 265
Imperfect Information 266
Evaluating the Market Mechanism 266
SUMMARY 267
REVIEW TERMS AND CONCEPTS 268
PROBLEM SET 268
PART III Market Imperfections and the Role
of Government 271
13. Monopoly and Antitrust Policy 271
Imperfect Competition and Market Power:
Core Concepts 271
Defining Industry Boundaries 272
Barriers to Entry 272
Price: The Fourth Decision Variable 274
NEWS ANALYSIS The Drug Wars in 2005 275
Price and Output Decisions in Pure Monopoly
Markets 275
Demand in Monopoly Markets 276
Perfect Competition and Monopoly
Compared 282
Collusion and Monopoly Compared 284
The Social Costs of Monopoly 284
Inefficiency and Consumer Loss 284
Rent-Seeking Behavior 286
Price Discrimination 287
Examples of Price Discrimination 287
Remedies for Monopoly: Antitrust Policy 288
The Development of Antitrust Law:
Historical Background 289
Landmark Antitrust Legislation 289
The Enforcement of Antitrust Law 292
Initiating Antitrust Actions 292
Sanctions and Remedies 292
NEWS ANALYSIS Price-Fixing Cases in 2005 294
A Natural Monopoly 294
Do Natural Monopolies Still Exist? 295
NEWS ANALYSIS From a Natural Monopoly
to Near-Perfect Competition 296
CONTENTS XV
Imperfect Markets: A Review and A Look Ahead 296
SUMMARY 297
REVIEW TERMS AND CONCEPTS 298
PROBLEM SET 298
14. Monopolistic Competition
and Oligopoly 301
Monopolistic Competition 302
Product Differentiation, Advertising, and Social
Welfare 303
Price and Output Determination in Monopolistic
Competition 306
Economic Efficiency and Resource Allocation 310
Oligopoly 310
Oligopoly Models 311
FURTHER EXPLORATION Regulation of Mergers
by the Department of Justice and the Federal Trade
Commission 313
Game Theory 314
Repeated Games 317
A Game with Many Players: Collective Action Can Be
Blocked by a Prisoners Dilemma 318
Contestable Markets 319
Oligopoly and Economic Performance 320
Industrial Concentration and Technological Change 321
The Role of Government 321
Regulation of Mergers 321
NEWS ANALYSIS Footwear Giant Adidas Ruys Reebok
in 2005 323
A Proper Role? 323
SUMMARY 324
REVIEW TERMS AND CONCEPTS 325
PROBLEM SET 325
15. Externalities, Public Goods, Imperfect
Information, and Social Choice 327
Externalities and Environmental Economics 328
Marginal Social Cost and Marginal-Cost Pricing 328
Private Choices and External Effects 330
Internalizing Externalities 332
NEWS ANALYSIS Externalities Are All Around Us 334
FURTHER EXPLORATION Global Warming:
A Global Externality? 338
Public (Social) Goods 338
The Characteristics of Public Goods 338
Income Distribution As a Public Good? 339
Public Provision of Public Goods 340
Optimal Provision of Public Goods 340
Local Provision of Public Goods: Tiebout
Hypothesis 343
Mixed Goods 344
Imperfect Information 344
Adverse Selection: Asymmetric Information 345
Moral Hazard 345
Market Solutions 346
Government Solutions 346
Social Choice 347
The Voting Paradox 347
Government Inefficiency: Theory of Public Choice 349
Rent-Seeking Revisited 350
Government and the Market 350
SUMMARY 351
REVIEW TERMS AND CONCEPTS 352
PROBLEM SET 352
16. Income Distribution and Poverty 355
The Utility Possibilities Frontier 355
The Sources of Household Income 357
Wages and Salaries 357
Income from Property 359
Income from the Government: Transfer
Payments 359
The Distribution of Income 360
Income Inequality in the United States 360
Poverty 363
The Distribution of Wealth 364
NEWS ANALYSIS Hunger in the United States
in 2003 365
The Redistribution Debate 366
Arguments against Redistribution 366
Arguments in Favor of Redistribution 367
Redistribution Programs and Policies 369
Financing Redistribution Programs: Taxes 369
Expenditure Programs 370
NEWS ANALYSIS The Lack of Health Care
Insurance 372
How Effective Are Antipoverty Programs? 373
Government or the Market? A Review 373
SUMMARY 374
REVIEW TERMS AND CONCEPTS 375
PROBLEM SET 375
xvi CONTENTS
17. Public Finance: The Economics
of Taxation 577
The Economics of Taxation 377
Taxes: Basic Concepts 377
Tax Equity 381
What is the Best Tax Base? 382
The Gift and Estate Tax 384
Tax Incidence: Who Pays? 385
The Incidence of Payroll Taxes 385
The Incidence of Corporate Profits Taxes 389
The Overall Incidence of Taxes in the United States:
Empirical Evidence 390
Excess Burdens and the Principle of Neutrality 391
How Do Excess Burdens Arise? 391
The Principle of Second Best 393
NEWS ANALYSIS President Bush s Advisory Panel
on Federal Tax Reform 394
Measuring Excess Burdens 395
Excess Burdens and the Degree of Distortion 395
SUMMARY 396
REVIEW TERMS AND CONCEPTS 397
PROBLEM SET 398
PÂRTIV Concepts and Problems
in Macroeconomics 399
18. Introduction to Macroeconomics 399
The Roots of Macroeconomics 400
The Great Depression 400
Recent Macroeconomic History 400
FURTHER EXPLORATION The Great Depression
and John Maynard Keynes 401
Macroeconomic Concerns 402
Inflation and Deflation 402
Output Growth: Short Run and Long Run 403
Unemployment 403
Government in the Macroeconomy 404
Fiscal Policy 404
Monetary Policy 404
FURTHER EXPLORATION Macroeconomic Concerns
from the Federal Reserve in 2005 405
Growth Policies 405
The Components of the Macroeconomy 406
The Circular Flow Diagram 406
The Three Market Arenas 407
The Methodology of Macroeconomics 408
Connections to Microeconomics 409
Aggregate Demand and Aggregate Supply 409
The U.S. Economy Since 1900: Trends
and Cycles 410
Expansion and Contraction: The Business Cycle 410
The U.S. Economy Since 1970 411
SUMMARY 414
REVIEW TERMS AND CONCEPTS 414
PROBLEM SET 415
19. Measuring National Output and National
Income 417
Gross Domestic Product 417
Final Goods and Services 418
Exclusion of Used Goods and Paper
Transactions 418
Exclusion of Output Produced Abroad by Domestically
Owned Factors of Production 419
Calculating GDP 419
The Expenditure Approach 420
FURTHER EXPLORATION GDP: One of the Great
Inventions of the 20th Century—Survey of Current
Rusiness 422
The Income Approach 424
Nominal versus Real GDP 426
Calculating Real GDP 426
Calculating the GDP Deflator 428
The Problems of Fixed Weights 428
Limitations of the GDP Concept 429
GDP and Social Welfare 429
The Underground Economy 430
Gross National Income Per Capita 430
Looking Ahead 431
SUMMARY 431
REVIEW TERMS AND CONCEPTS 432
PROBLEM SET 432
20. Long-Run and Short-Run Concerns:
Growth, Productivity, Unemployment,
and Inflation 435
Long-Run Output and Productivity Growth 436
Recessions, Depressions, and Unemployment 438
Defining and Measuring Unemployment 439
CONTENTS XVii
Components of the Unemployment Rate 440
The Costs of Unemployment 443
NEWS ANALYSIS Jobs and Hurricanes in 2005 444
The Benefits of Recessions 446
Inflation 447
Defining Inflation 447
Price Indexes 447
The Costs of Inflation 449
FURTHER EXPLORATION World Economy in Transilion:
Bias in the US Consumer Price Index—Why It Could
Be Important 450
Inflation: Public Enemy Number One? 451
Looking Ahead 452
SUMMARY 452
REVIEW TERMS AND CONCEPTS 453
PROBLEM SET 453
PARTV The Goods and Money Markets 455
21. Aggregate Expenditure and Equilibrium
Output 455
Aggregate Output and Aggregate Income ( Y) 456
Income, Consumption, and Saving
( Y, C, and S) 457
Explaining Spending Behavior 457
Planned Investment (I) 461
Planned Aggregate Expenditure (AE) 463
Equilibrium Aggregate Output (Income) 464
The Saving/Investment Approach to Equilibrium 467
NEWS ANALYSIS Inventory Changes Signal Slower
Growth 468
Adjustment to Equilibrium 468
The Multiplier 469
The Multiplier Equation 471
FURTHER EXPLORATION The Paradox of Thrift 473
The Size of the Multiplier in the Real World 473
The Multiplier in Action: Recovering From the Great
Depression 474
Looking Ahead 475
SUMMARY 475
REVIEW TERMS AND CONCEPTS 475
PROBLEM SET 476
APPENDIX: DERIVING THE MULTIPLIER
ALGEBRAICALLY 477
22. The Government and Fiscal Policy 479
Government in the Economy 480
Government Purchases (G), Net Taxes (T),
and Disposable Income ( Yd) 480
Equilibrium Output: Y= C + I + G 482
Fiscal Policy at Work: Multiplier Effects 484
The Government Spending Multiplier 485
The Tax Multiplier 486
The Balanced-Budget Multiplier 488
The Federal Budget 490
The Budget 490
NEWS ANALYSIS The Effect of a Natural Disaster
on Government Spending and Taxation, 2005 491
The Surplus or Deficit 492
The Debt 492
The Economy s Influence on the Government
Budget 493
Tax Revenues Depend on the State
of the Economy 493
Some Government Expenditures Depend on the State
of the Economy 493
Automatic Stabilizers 494
Fiscal Drag 494
Full-Employment Budget 494
Looking Ahead 495
SUMMARY 495
REVIEW TERMS AND CONCEPTS 496
PROBLEM SET 496
APPENDIX A: DERIVING THE FISCAL POLICY
MULTIPLIERS 497
APPENDIX B: THE CASE IN WHICH TAX REVENUES
DEPEND ON INCOME 498
23. The Money Supply and the Federal Reserve
System 501
An Overview of Money 501
What Is Money? 501
NEWS ANALYSIS Real Goods as a Store of Value During
Inflation 503
Commodity and Fiat Monies 504
Measuring the Supply of Money in the United
States 504
The Private Banking System 506
How Banks Create Money 506
A Historical Perspective: Goldsmiths 506
XX CONTENTS
SUMMARY 636
REVIEW TERMS AND CONCEPTS 636
PROBLEM SET 636
30. Household and Firm Behavior
in the Macroeconomy:
A Further Look 639
Households: Consumption and Labor Supply
Decisions 639
The Keynesian Theory of Consumption:
A Review 639
The Life-Cycle Theory of Consumption 640
NEWS ANALYSIS A New Pattern of Consumption
and Income, 1946-1947 642
The Labor Supply Decision 642
Interest Rate Effects on Consumption 644
Government Effects on Consumption and Labor
Supply: Taxes and Transfers 645
A Possible Employment Constraint
on Households 645
A Summary of Household Behavior 646
The Household Sector Since 1970 647
Firms: Investment and Employment
Decisions 649
Expectations and Animal Spirits 651
Excess Labor and Excess Capital Effects 652
Inventory Investment 653
A Summary of Firm Behavior 654
The Firm Sector Since 1970 654
Productivity and the Business Cycle 657
The Relationship Between Output
and Unemployment 658
The Size of the Multiplier 659
SUMMARY 660
REVIEW TERMS AND CONCEPTS 661
PROBLEM SET 662
31. Long-Run Growth 663
The Growth Process: From Agriculture
to Industry 663
The Sources of Economic Growth 665
An Increase in Labor Supply 665
Increases in Physical Capital 667
Increases in Human Capital 668
Increases in Productivity 668
Growth and Productivity in the United
States 669
Sources of Growth in the U.S. Economy:
1929-1982 670
Labor Productivity: 1952 1-2003 II 671
Economic Growth and Public Policy 672
Suggested Public Policies 672
NEWS ANALYSIS Productivity Gains in Health
Care 673
FURTHER EXPLORATION Can We ReaUy Measure
Productivity Changes? 674
Growth Policy: A Long-Run Proposition 675
The Pros and Cons of Growth 676
The Progrowth Argument 676
The Antigrowth Argument 677
Summary: No Right Answer 679
SUMMARY 679
REVIEW TERMS AND CONCEPTS 680
PROBLEM SET 680
32. Debates in Macroeconomics:
Monetarism, New Classical Theory,
and Supply-Side Economics 683
Keynesian Economics 683
Monetarism 684
The Velocity of Money 684
The Quantity Theory of Money 685
Inflation as a Purely Monetary Phenomenon 686
The Keynesian/Monetarist Debate 687
New Classical Macroeconomics 688
The Development of New Classical
Macroeconomics 688
NEWS ANALYSIS Inflation and Money Supply in Latin
America 689
Rational Expectations 689
Evaluating Rational-Expectations Theory 692
Real Business Cycle Theory 692
Supply-Side Economics 693
Evaluating Supply-Side Economics 694
Testing Alternative Macroeconomic
Models 695
SUMMARY 696
REVIEW TERMS AND CONCEPTS 696
PROBLEM SET 697
CONTENTS XXi
PART VII The World Economy 699
33. International Trade, Comparative
Advantage, and Protectionism 699
Trade Surpluses and Deficits 700
The Economic Basis for Trade: Comparative
Advantage 700
Absolute Advantage versus Comparative
Advantage 701
Terms of Trade 705
Exchange Rates 706
The Sources of Comparative Advantage 708
The Heckscher-Ohlin Theorem 709
Other Explanations for Observed Trade Flows 709
Trade Barriers: Tariffs, Export Subsidies,
and Quotas 709
NEWS ANALYSIS New Trade Agreement
with Central America and the Dominican
Republic—2005 712
Free Trade or Protection? 713
The Case for Free Trade 713
The Case for Protection 714
FURTHER EXPLORATION A Petition 716
An Economic Consensus 717
SUMMARY 717
REVIEW TERMS AND CONCEPTS 719
PROBLEM SET 719
34. Open-Economy Macroeconomics:
The Balance of Payments and Exchange
Rates 721
The Balance of Payments 722
The Current Account 723
The Capital Account 724
The United States as a Debtor Nation 725
Equilibrium Output (Income) in an Open
Economy 726
The International Sector and Planned Aggregate
Expenditure 726
Imports and Exports and the Trade Feedback
Effect 728
Import and Export Prices and the Price Feedback
Effect 729
The Open Economy with Flexible Exchange
Rates 730
The Market for Foreign Exchange 730
Factors That Affect Exchange Rates 733
The Effects of Exchange Rates on the Economy 736
NEWS ANALYSIS The Dollar, China, and Trade
in 2006 738
An Interdependent World Economy 740
SUMMARY 740
REVIEW TERMS AND CONCEPTS 741
PROBLEM SET 741
APPENDIX: WORLD MONETARY SYSTEMS SINCE
1900 742
35. Globalization 747
The Global Circular Flow 747
A Brief History of Economic Globalization 749
The Benefits and Costs of Globalization 750
The Free-Trade Debate Revisited 750
Trade, Growth, and Poverty 752
The Globalization of Labor Markets: The Economics
of Immigration and Outsourcing 753
Capital Mobility 756
NEWS ANALYSIS Outsourcing Is Not Just Customer
Service Reps in India 757
Public Policy and Globalization 758
Global Externalities and Public Goods 758
Nongovernmental Organizations and International
Economics: The Washington Consensus 759
Globalization, Capitalism, and Democracy 760
A Final Word 761
SUMMARY 761
REVIEW TERMS AND CONCEPTS 762
PROBLEM SET 762
36. Economic Growth in Developing
and Transitional Economies 763
Life in the Developing Nations: Population
and Poverty 764
Economic Development: Sources and
Strategies 765
The Sources of Economic Development 765
Strategies for Economic Development 767
NEWS ANALYSIS Trade and Development
in Africa—2003 770
Growth versus Development: The Policy
Cycle 771
XXii CONTENTS
Issues in Economic Development 771
Population Growth 772
Developing-Country Debt Burdens 774
Economies in Transition 775
Political Systems and Economic Systems: Socialism,
Capitalism, and Communism 776
Central Planning Versus the Market 111
The End of the Soviet Union 778
The Transition to a Market Economy 778
Six Basic Requirements for Successful Transition 778
NEWS ANALYSIS Russia s Economy in 2005 779
SUMMARY 783
REVIEW TERMS AND CONCEPTS 784
PROBLEM SET 784
Glossary G-l
Solutions to Even-Numbered Problems S-l
Index 1-1
Photo Credits P-l
|
| adam_txt |
Titel: Principles of economics
Autor: Case, Karl E
Jahr: 2007
Contents
Preface xxvii
PART i Introduction to Economics 1
1. The Scope and Method of Economics 1
Why Study Economics? 2
To Learn a Way of Thinking 2
To Understand Society 4
NEWS ANALYSIS Economics and Global Affairs
in 2005 5
To Understand Global Affairs 6
To Be an Informed Voter 6
The Scope of Economics 7
Microeconomics and Macroeconomics 8
The Diverse Fields of Economics 8
FURTHER EXPLORATION The Fields of
Economics 9
The Method of Economics 10
Theories and Models 11
Economic Policy 14
An Invitation 16
SUMMARY 16
REVIEW TERMS AND CONCEPTS 16
PROBLEM SET 17
APPENDIX: HOW TO READ AND UNDERSTAND
GRAPHS 17
2. The Economic Problem: Scarcity
and Choice 25
Scarcity, Choice, and Opportunity Cost 26
Scarcity and Choice in a One-Person Economy 26
NEWS ANALYSIS Opportunity Costs
and Internships 27
Scarcity and Choice in an Economy of Two
or More 28
The Production Possibility Frontier 31
Comparative Advantage and the Gains
from Trade 36
The Economic Problem 39
Economic Systems 39
Command Economies 39
Laissez-Faire Economies: The Free Market 40
Mixed Systems, Markets, and Governments 41
Looking Ahead 42
SUMMARY 42
REVIEW TERMS AND CONCEPTS 43
PROBLEM SET 43
3. Demand, Supply, and Market
Equilibrium 47
Firms and Households: The Basic Decision-Making
Units 48
Input Markets and Output Markets: The Circular
Flow 48
Demand in Product/Output Markets 50
Changes in Quantity Demanded Versus Changes
in Demand 51
Price and Quantity Demanded: The Law of Demand
Other Determinants of Household Demand 54
Shift of Demand versus Movement Along a Demand
Curve 56
From Household Demand to Market Demand 57
Supply in Product/Output Markets 59
Price and Quantity Supplied: The Law of Supply 60
Other Determinants of Supply 61
Shift of Supply versus Movement along a Supply
Curve 62
From Individual Supply to Market Supply 63
Market Equilibrium 64
Excess Demand 65
Excess Supply 66
Changes in Equilibrium 67
Demand and Supply in Product Markets:
A Review 70
Looking Ahead: Markets and the Allocation
of Resources 70
NEWS ANALYSIS Mad Cow Disease Cuts Demand
for Cattle in 2005 71
SUMMARY 72
REVIEW TERMS AND CONCEPTS 73
PROBLEM SET 73
CONTENTS
Demand and Supply Applications 77
The Price System: Rationing and Allocating
Resources 77
Price Rationing 77
Constraints on the Market and Alternative Rationing
Mechanisms 79
NEWS ANALYSIS Hurricane Katrina and Gasoline Prices
in 2005 83
Prices and the Allocation of Resources 84
Price Floors 84
Supply and Demand Analysis: An Oil Import Fee 85
Supply and Demand and Market Efficiency 86
Consumer Surplus 87
Producer Surplus 88
Competitive Markets Maximize the Sum of Producer
and Consumer Surplus 89
Potential Causes of Deadweight Loss
from Under- and Overproduction 89
FURTHER EXPLORATION The Drug Wars: A Matter
of Supply and Demand 90
Looking Ahead 91
SUMMARY 91
REVIEW TERMS AND CONCEPTS 92
PROBLEM SET 92
Elasticity 95
Price Elasticity of Demand 96
Slope and Elasticity 96
Types of Elasticity 97
NEWS ANALYSIS Elasticity of Supply and House
Prices 99
Calculating Elasticities 100
Calculating Percentage Changes 100
Elasticity Is a Ratio of Percentages 101
The Midpoint Formula 101
Elasticity Changes along a Straight-Line Demand
Curve 102
Elasticity and Total Revenue 104
The Determinants of Demand Elasticity 105
Availability of Substitutes 105
The Importance of Being Unimportant 105
FURTHER EXPLORATION London Newspapers
and New York Restaurants Learn about Elasticity 106
The Time Dimension 106
Other Important Elasticities 107
Income Elasticity of Demand 107
Cross-Price Elasticity of Demand 107
Elasticity of Supply 107
Looking Ahead 108
SUMMARY 108
REVIEW TERMS AND CONCEPTS 109
PROBLEM SET 109
APPENDIX: POINT ELASTICITY (OPTIONAL) 110
PART II Foundations of Microeconomics:
Consumers and Firms 113
6. Household Behavior and Consumer
Choice 113
Household Choice in Output Markets 116
The Determinants of Household Demand 116
The Budget Constraint 116
FURTHER EXPLORATION Opportunity Costs-
Then and Now 119
The Equation of the Budget Constraint 120
The Basis of Choice: Utility 122
Diminishing Marginal Utility 122
Allocating Income to Maximize Utility 123
The Utility-Maximizing Rule 125
Diminishing Marginal Utility and Downward-Sloping
Demand 125
Income and Substitution Effects 126
The Income Effect 126
NEWS ANALYSIS Marginal Utility and the Capacity
to Consume 127
The Substitution Effect 128
Consumer Surplus 128
Household Choice in Input Markets 130
The Labor Supply Decision 130
The Price of Leisure 131
Income and Substitution Effects of a Wage Change 131
Saving and Borrowing: Present Versus Future
Consumption 133
A Review: Households in Output and Input
Markets 134
SUMMARY 134
REVIEW TERMS AND CONCEPTS 135
PROBLEM SET 135
APPENDIX: INDIFFERENCE CURVES 137
CONTENTS Xi ii
7. The Production Process: The Behavior
of Profit-Maximizing Firms 143
The Behavior of Profit-Maximizing Firms 146
Profits and Economic Costs 146
NEWS ANALYSIS An Idea, a Firm, and Profits
in 2005 148
Short-Run versus Long-Run Decisions 149
The Bases of Decisions: Market Price of Outputs,
Available Technology, and Input Prices 150
The Production Process 151
Production Functions: Total Product, Marginal Product,
and Average Product 151
Production Functions with Two Variable Factors
of Production 154
Choice of Technology 155
NEWS ANALYSIS Increasing Substitution of Capital
for Labor Raises Labor Productivity 156
Looking Ahead: Cost and Supply 157
SUMMARY 157
REVIEW TERMS AND CONCEPTS 158
PROBLEM SET 158
APPENDIX: ISOQUANTS AND ISOCOSTS 159
8. Short-Run Costs and Output
Decisions 165
Costs in the Short Run 165
Fixed Costs 166
Variable Costs 168
Total Costs 174
Short-Run Costs: A Review 176
Output Decisions: Revenues, Costs, and Profit
Maximization 176
Total Revenue (TR) and Marginal Revenue (MR) 177
Comparing Costs and Revenues to Maximize Profit 178
FURTHER EXPLORATION Case Study in Marginal
Analysis: An Ice Cream Parlor 180
The Short-Run Supply Curve 181
Looking Ahead 182
SUMMARY 183
REVIEW TERMS AND CONCEPTS 183
PROBLEM SET 184
9. Long-Run Costs and Output
Decisions 187
Short-Run Conditions and Long-Run Directions 188
Maximizing Profits 188
Minimizing Losses 190
The Short-Run Industry Supply Curve 192
Long-Run Directions: A Review 194
Long-Run Costs: Economies and Diseconomies
of Scale 194
Increasing Returns to Scale 195
FURTHER EXPLORATION Why Small Farmers
Have Trouble Competing: Economies of Scale
in Agriculture 197
Constant Returns to Scale 197
NEWS ANALYSIS Economies of Scale in Ranking,
2005 198
Decreasing Returns to Scale 199
Long-Run Adjustments to Short-Run
Conditions 200
Short-Run Profits: Expansion to Equilibrium 200
Short-Run Losses: Contraction to Equilibrium 201
The Long-Run Adjustment Mechanism: Investment
Flows Toward Profit Opportunities 202
FURTHER EXPLORATION The Long-Run Average Cost
Curve: Flat or U-Shaped 203
Output Markets: A Final Word 204
SUMMARY 204
REVIEW TERMS AND CONCEPTS 205
PROBLEM SET 205
APPENDIX: EXTERNAL ECONOMIES
AND DISECONOMIES AND THE LONG-RUN
INDUSTRY SUPPLY CURVE 207
10. Input Demand: The Labor and Land
Markets 211
Input Markets: Basic Concepts 211
Demand for Inputs: A Derived Demand 211
Inputs: Complementary and Substitutable 213
Diminishing Returns 213
Marginal Revenue Product 213
Labor Markets 215
A Firm Using Only One Variable Factor of Production:
Labor 215
NEWS ANALYSIS Baseball Salaries and Marginal
Revenue Product in 2005 217
A Firm Employing Two Variable Factors of Production
in the Short and Long Run 219
Many Labor Markets 221
Land Markets 221
Rent and the Value of Output Produced on Land 222
CONTENTS
The Firm's Profit-Maximization Condition in Input
Markets 223
Input Demand Curves 224
Shifts in Factor Demand Curves 224
Resource Allocation and the Mix of Output
in Competitive Markets 225
The Distribution of Income 226
Looking Ahead 226
SUMMARY 226
REVIEW TERMS AND CONCEPTS 227
PROBLEM SET 227
Input Demand: The Capital Market
and the Investment Decision 231
Capital, Investment, and Depreciation 231
Capital 232
Investment and Depreciation 233
The Capital Market 234
Capital Income: Interest and Profits 235
Financial Markets in Action 237
Capital Accumulation and Allocation 238
NEWS ANALYSIS Putting Their Money Where
the Future Is in 2005 239
The Demand for New Capital and the Investment
Decision 240
Forming Expectations 240
Comparing Costs and Expected Return 241
A Final Word on Capital 243
SUMMARY 244
REVIEW TERMS AND CONCEPTS 245
PROBLEM SET 245
APPENDIX: CALCULATING PRESENT VALUE 246
General Etptilibrium and the Efficiency
of Perfect Competition 251
General Equilibrium Analysis 253
An Early Technological Advance: The Electronic
Calculator 253
NEWS ANALYSIS The Dot-Com Bust and the Lahor
Market: 2003 254
Market Adjustment to Changes in Demand 256
Formal Proof of a General Competitive
Equilibrium 258
Allocative Efficiency and Competitive Equilibrium 258
Pareto Efficiency 259
The Efficiency of Perfect Competition 260
Perfect Competition versus Real Markets 263
The Sources of Market Failure 263
Imperfect Markets 263
Public Goods 264
Externalities 265
Imperfect Information 266
Evaluating the Market Mechanism 266
SUMMARY 267
REVIEW TERMS AND CONCEPTS 268
PROBLEM SET 268
PART III Market Imperfections and the Role
of Government 271
13. Monopoly and Antitrust Policy 271
Imperfect Competition and Market Power:
Core Concepts 271
Defining Industry Boundaries 272
Barriers to Entry 272
Price: The Fourth Decision Variable 274
NEWS ANALYSIS The Drug Wars in 2005 275
Price and Output Decisions in Pure Monopoly
Markets 275
Demand in Monopoly Markets 276
Perfect Competition and Monopoly
Compared 282
Collusion and Monopoly Compared 284
The Social Costs of Monopoly 284
Inefficiency and Consumer Loss 284
Rent-Seeking Behavior 286
Price Discrimination 287
Examples of Price Discrimination 287
Remedies for Monopoly: Antitrust Policy 288
The Development of Antitrust Law:
Historical Background 289
Landmark Antitrust Legislation 289
The Enforcement of Antitrust Law 292
Initiating Antitrust Actions 292
Sanctions and Remedies 292
NEWS ANALYSIS Price-Fixing Cases in 2005 294
A Natural Monopoly 294
Do Natural Monopolies Still Exist? 295
NEWS ANALYSIS From a Natural Monopoly
to Near-Perfect Competition 296
CONTENTS XV
Imperfect Markets: A Review and A Look Ahead 296
SUMMARY 297
REVIEW TERMS AND CONCEPTS 298
PROBLEM SET 298
14. Monopolistic Competition
and Oligopoly 301
Monopolistic Competition 302
Product Differentiation, Advertising, and Social
Welfare 303
Price and Output Determination in Monopolistic
Competition 306
Economic Efficiency and Resource Allocation 310
Oligopoly 310
Oligopoly Models 311
FURTHER EXPLORATION Regulation of Mergers
by the Department of Justice and the Federal Trade
Commission 313
Game Theory 314
Repeated Games 317
A Game with Many Players: Collective Action Can Be
Blocked by a Prisoners' Dilemma 318
Contestable Markets 319
Oligopoly and Economic Performance 320
Industrial Concentration and Technological Change 321
The Role of Government 321
Regulation of Mergers 321
NEWS ANALYSIS Footwear Giant Adidas Ruys Reebok
in 2005 323
A Proper Role? 323
SUMMARY 324
REVIEW TERMS AND CONCEPTS 325
PROBLEM SET 325
15. Externalities, Public Goods, Imperfect
Information, and Social Choice 327
Externalities and Environmental Economics 328
Marginal Social Cost and Marginal-Cost Pricing 328
Private Choices and External Effects 330
Internalizing Externalities 332
NEWS ANALYSIS Externalities Are All Around Us 334
FURTHER EXPLORATION Global Warming:
A Global Externality? 338
Public (Social) Goods 338
The Characteristics of Public Goods 338
Income Distribution As a Public Good? 339
Public Provision of Public Goods 340
Optimal Provision of Public Goods 340
Local Provision of Public Goods: Tiebout
Hypothesis 343
Mixed Goods 344
Imperfect Information 344
Adverse Selection: Asymmetric Information 345
Moral Hazard 345
Market Solutions 346
Government Solutions 346
Social Choice 347
The Voting Paradox 347
Government Inefficiency: Theory of Public Choice 349
Rent-Seeking Revisited 350
Government and the Market 350
SUMMARY 351
REVIEW TERMS AND CONCEPTS 352
PROBLEM SET 352
16. Income Distribution and Poverty 355
The Utility Possibilities Frontier 355
The Sources of Household Income 357
Wages and Salaries 357
Income from Property 359
Income from the Government: Transfer
Payments 359
The Distribution of Income 360
Income Inequality in the United States 360
Poverty 363
The Distribution of Wealth 364
NEWS ANALYSIS Hunger in the United States
in 2003 365
The Redistribution Debate 366
Arguments against Redistribution 366
Arguments in Favor of Redistribution 367
Redistribution Programs and Policies 369
Financing Redistribution Programs: Taxes 369
Expenditure Programs 370
NEWS ANALYSIS The Lack of Health Care
Insurance 372
How Effective Are Antipoverty Programs? 373
Government or the Market? A Review 373
SUMMARY 374
REVIEW TERMS AND CONCEPTS 375
PROBLEM SET 375
xvi CONTENTS
17. Public Finance: The Economics
of Taxation 577
The Economics of Taxation 377
Taxes: Basic Concepts 377
Tax Equity 381
What is the "Best" Tax Base? 382
The Gift and Estate Tax 384
Tax Incidence: Who Pays? 385
The Incidence of Payroll Taxes 385
The Incidence of Corporate Profits Taxes 389
The Overall Incidence of Taxes in the United States:
Empirical Evidence 390
Excess Burdens and the Principle of Neutrality 391
How Do Excess Burdens Arise? 391
The Principle of Second Best 393
NEWS ANALYSIS President Bush's Advisory Panel
on Federal Tax Reform 394
Measuring Excess Burdens 395
Excess Burdens and the Degree of Distortion 395
SUMMARY 396
REVIEW TERMS AND CONCEPTS 397
PROBLEM SET 398
PÂRTIV Concepts and Problems
in Macroeconomics 399
18. Introduction to Macroeconomics 399
The Roots of Macroeconomics 400
The Great Depression 400
Recent Macroeconomic History 400
FURTHER EXPLORATION The Great Depression
and John Maynard Keynes 401
Macroeconomic Concerns 402
Inflation and Deflation 402
Output Growth: Short Run and Long Run 403
Unemployment 403
Government in the Macroeconomy 404
Fiscal Policy 404
Monetary Policy 404
FURTHER EXPLORATION Macroeconomic Concerns
from the Federal Reserve in 2005 405
Growth Policies 405
The Components of the Macroeconomy 406
The Circular Flow Diagram 406
The Three Market Arenas 407
The Methodology of Macroeconomics 408
Connections to Microeconomics 409
Aggregate Demand and Aggregate Supply 409
The U.S. Economy Since 1900: Trends
and Cycles 410
Expansion and Contraction: The Business Cycle 410
The U.S. Economy Since 1970 411
SUMMARY 414
REVIEW TERMS AND CONCEPTS 414
PROBLEM SET 415
19. Measuring National Output and National
Income 417
Gross Domestic Product 417
Final Goods and Services 418
Exclusion of Used Goods and Paper
Transactions 418
Exclusion of Output Produced Abroad by Domestically
Owned Factors of Production 419
Calculating GDP 419
The Expenditure Approach 420
FURTHER EXPLORATION GDP: One of the Great
Inventions of the 20th Century—Survey of Current
Rusiness 422
The Income Approach 424
Nominal versus Real GDP 426
Calculating Real GDP 426
Calculating the GDP Deflator 428
The Problems of Fixed Weights 428
Limitations of the GDP Concept 429
GDP and Social Welfare 429
The Underground Economy 430
Gross National Income Per Capita 430
Looking Ahead 431
SUMMARY 431
REVIEW TERMS AND CONCEPTS 432
PROBLEM SET 432
20. Long-Run and Short-Run Concerns:
Growth, Productivity, Unemployment,
and Inflation 435
Long-Run Output and Productivity Growth 436
Recessions, Depressions, and Unemployment 438
Defining and Measuring Unemployment 439
CONTENTS XVii
Components of the Unemployment Rate 440
The Costs of Unemployment 443
NEWS ANALYSIS Jobs and Hurricanes in 2005 444
The Benefits of Recessions 446
Inflation 447
Defining Inflation 447
Price Indexes 447
The Costs of Inflation 449
FURTHER EXPLORATION World Economy in Transilion:
Bias in the US Consumer Price Index—Why It Could
Be Important 450
Inflation: Public Enemy Number One? 451
Looking Ahead 452
SUMMARY 452
REVIEW TERMS AND CONCEPTS 453
PROBLEM SET 453
PARTV The Goods and Money Markets 455
21. Aggregate Expenditure and Equilibrium
Output 455
Aggregate Output and Aggregate Income ( Y) 456
Income, Consumption, and Saving
( Y, C, and S) 457
Explaining Spending Behavior 457
Planned Investment (I) 461
Planned Aggregate Expenditure (AE) 463
Equilibrium Aggregate Output (Income) 464
The Saving/Investment Approach to Equilibrium 467
NEWS ANALYSIS Inventory Changes Signal Slower
Growth 468
Adjustment to Equilibrium 468
The Multiplier 469
The Multiplier Equation 471
FURTHER EXPLORATION The Paradox of Thrift 473
The Size of the Multiplier in the Real World 473
The Multiplier in Action: Recovering From the Great
Depression 474
Looking Ahead 475
SUMMARY 475
REVIEW TERMS AND CONCEPTS 475
PROBLEM SET 476
APPENDIX: DERIVING THE MULTIPLIER
ALGEBRAICALLY 477
22. The Government and Fiscal Policy 479
Government in the Economy 480
Government Purchases (G), Net Taxes (T),
and Disposable Income ( Yd) 480
Equilibrium Output: Y= C + I + G 482
Fiscal Policy at Work: Multiplier Effects 484
The Government Spending Multiplier 485
The Tax Multiplier 486
The Balanced-Budget Multiplier 488
The Federal Budget 490
The Budget 490
NEWS ANALYSIS The Effect of a Natural Disaster
on Government Spending and Taxation, 2005 491
The Surplus or Deficit 492
The Debt 492
The Economy's Influence on the Government
Budget 493
Tax Revenues Depend on the State
of the Economy 493
Some Government Expenditures Depend on the State
of the Economy 493
Automatic Stabilizers 494
Fiscal Drag 494
Full-Employment Budget 494
Looking Ahead 495
SUMMARY 495
REVIEW TERMS AND CONCEPTS 496
PROBLEM SET 496
APPENDIX A: DERIVING THE FISCAL POLICY
MULTIPLIERS 497
APPENDIX B: THE CASE IN WHICH TAX REVENUES
DEPEND ON INCOME 498
23. The Money Supply and the Federal Reserve
System 501
An Overview of Money 501
What Is Money? 501
NEWS ANALYSIS Real Goods as a Store of Value During
Inflation 503
Commodity and Fiat Monies 504
Measuring the Supply of Money in the United
States 504
The Private Banking System 506
How Banks Create Money 506
A Historical Perspective: Goldsmiths 506
XX CONTENTS
SUMMARY 636
REVIEW TERMS AND CONCEPTS 636
PROBLEM SET 636
30. Household and Firm Behavior
in the Macroeconomy:
A Further Look 639
Households: Consumption and Labor Supply
Decisions 639
The Keynesian Theory of Consumption:
A Review 639
The Life-Cycle Theory of Consumption 640
NEWS ANALYSIS A New Pattern of Consumption
and Income, 1946-1947 642
The Labor Supply Decision 642
Interest Rate Effects on Consumption 644
Government Effects on Consumption and Labor
Supply: Taxes and Transfers 645
A Possible Employment Constraint
on Households 645
A Summary of Household Behavior 646
The Household Sector Since 1970 647
Firms: Investment and Employment
Decisions 649
Expectations and Animal Spirits 651
Excess Labor and Excess Capital Effects 652
Inventory Investment 653
A Summary of Firm Behavior 654
The Firm Sector Since 1970 654
Productivity and the Business Cycle 657
The Relationship Between Output
and Unemployment 658
The Size of the Multiplier 659
SUMMARY 660
REVIEW TERMS AND CONCEPTS 661
PROBLEM SET 662
31. Long-Run Growth 663
The Growth Process: From Agriculture
to Industry 663
The Sources of Economic Growth 665
An Increase in Labor Supply 665
Increases in Physical Capital 667
Increases in Human Capital 668
Increases in Productivity 668
Growth and Productivity in the United
States 669
Sources of Growth in the U.S. Economy:
1929-1982 670
Labor Productivity: 1952 1-2003 II 671
Economic Growth and Public Policy 672
Suggested Public Policies 672
NEWS ANALYSIS Productivity Gains in Health
Care 673
FURTHER EXPLORATION Can We ReaUy Measure
Productivity Changes? 674
Growth Policy: A Long-Run Proposition 675
The Pros and Cons of Growth 676
The Progrowth Argument 676
The Antigrowth Argument 677
Summary: No Right Answer 679
SUMMARY 679
REVIEW TERMS AND CONCEPTS 680
PROBLEM SET 680
32. Debates in Macroeconomics:
Monetarism, New Classical Theory,
and Supply-Side Economics 683
Keynesian Economics 683
Monetarism 684
The Velocity of Money 684
The Quantity Theory of Money 685
Inflation as a Purely Monetary Phenomenon 686
The Keynesian/Monetarist Debate 687
New Classical Macroeconomics 688
The Development of New Classical
Macroeconomics 688
NEWS ANALYSIS Inflation and Money Supply in Latin
America 689
Rational Expectations 689
Evaluating Rational-Expectations Theory 692
Real Business Cycle Theory 692
Supply-Side Economics 693
Evaluating Supply-Side Economics 694
Testing Alternative Macroeconomic
Models 695
SUMMARY 696
REVIEW TERMS AND CONCEPTS 696
PROBLEM SET 697
CONTENTS XXi
PART VII The World Economy 699
33. International Trade, Comparative
Advantage, and Protectionism 699
Trade Surpluses and Deficits 700
The Economic Basis for Trade: Comparative
Advantage 700
Absolute Advantage versus Comparative
Advantage 701
Terms of Trade 705
Exchange Rates 706
The Sources of Comparative Advantage 708
The Heckscher-Ohlin Theorem 709
Other Explanations for Observed Trade Flows 709
Trade Barriers: Tariffs, Export Subsidies,
and Quotas 709
NEWS ANALYSIS New Trade Agreement
with Central America and the Dominican
Republic—2005 712
Free Trade or Protection? 713
The Case for Free Trade 713
The Case for Protection 714
FURTHER EXPLORATION A Petition 716
An Economic Consensus 717
SUMMARY 717
REVIEW TERMS AND CONCEPTS 719
PROBLEM SET 719
34. Open-Economy Macroeconomics:
The Balance of Payments and Exchange
Rates 721
The Balance of Payments 722
The Current Account 723
The Capital Account 724
The United States as a Debtor Nation 725
Equilibrium Output (Income) in an Open
Economy 726
The International Sector and Planned Aggregate
Expenditure 726
Imports and Exports and the Trade Feedback
Effect 728
Import and Export Prices and the Price Feedback
Effect 729
The Open Economy with Flexible Exchange
Rates 730
The Market for Foreign Exchange 730
Factors That Affect Exchange Rates 733
The Effects of Exchange Rates on the Economy 736
NEWS ANALYSIS The Dollar, China, and Trade
in 2006 738
An Interdependent World Economy 740
SUMMARY 740
REVIEW TERMS AND CONCEPTS 741
PROBLEM SET 741
APPENDIX: WORLD MONETARY SYSTEMS SINCE
1900 742
35. Globalization 747
The Global Circular Flow 747
A Brief History of Economic Globalization 749
The Benefits and Costs of Globalization 750
The Free-Trade Debate Revisited 750
Trade, Growth, and Poverty 752
The Globalization of Labor Markets: The Economics
of Immigration and Outsourcing 753
Capital Mobility 756
NEWS ANALYSIS Outsourcing Is Not Just Customer
Service Reps in India 757
Public Policy and Globalization 758
Global Externalities and Public Goods 758
Nongovernmental Organizations and International
Economics: The Washington Consensus 759
Globalization, Capitalism, and Democracy 760
A Final Word 761
SUMMARY 761
REVIEW TERMS AND CONCEPTS 762
PROBLEM SET 762
36. Economic Growth in Developing
and Transitional Economies 763
Life in the Developing Nations: Population
and Poverty 764
Economic Development: Sources and
Strategies 765
The Sources of Economic Development 765
Strategies for Economic Development 767
NEWS ANALYSIS Trade and Development
in Africa—2003 770
Growth versus Development: The Policy
Cycle 771
XXii CONTENTS
Issues in Economic Development 771
Population Growth 772
Developing-Country Debt Burdens 774
Economies in Transition 775
Political Systems and Economic Systems: Socialism,
Capitalism, and Communism 776
Central Planning Versus the Market 111
The End of the Soviet Union 778
The Transition to a Market Economy 778
Six Basic Requirements for Successful Transition 778
NEWS ANALYSIS Russia's Economy in 2005 779
SUMMARY 783
REVIEW TERMS AND CONCEPTS 784
PROBLEM SET 784
Glossary G-l
Solutions to Even-Numbered Problems S-l
Index 1-1
Photo Credits P-l |
| any_adam_object | 1 |
| any_adam_object_boolean | 1 |
| author | Case, Karl E. 1946- Fair, Ray C. 1942- |
| author_GND | (DE-588)131833197 (DE-588)131833251 |
| author_facet | Case, Karl E. 1946- Fair, Ray C. 1942- |
| author_role | aut aut |
| author_sort | Case, Karl E. 1946- |
| author_variant | k e c ke kec r c f rc rcf |
| building | Verbundindex |
| bvnumber | BV022466626 |
| callnumber-first | H - Social Science |
| callnumber-label | HB171 |
| callnumber-raw | HB171.5 |
| callnumber-search | HB171.5 |
| callnumber-sort | HB 3171.5 |
| callnumber-subject | HB - Economic Theory and Demography |
| classification_rvk | QC 072 |
| ctrlnum | (OCoLC)150247900 (DE-599)BVBBV022466626 |
| dewey-full | 330 |
| dewey-hundreds | 300 - Social sciences |
| dewey-ones | 330 - Economics |
| dewey-raw | 330 |
| dewey-search | 330 |
| dewey-sort | 3330 |
| dewey-tens | 330 - Economics |
| discipline | Wirtschaftswissenschaften |
| discipline_str_mv | Wirtschaftswissenschaften |
| edition | 8. ed. |
| format | Book |
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| genre | (DE-588)4123623-3 Lehrbuch gnd-content Leermiddelen (vorm) gtt |
| genre_facet | Lehrbuch Leermiddelen (vorm) |
| id | DE-604.BV022466626 |
| illustrated | Illustrated |
| index_date | 2024-07-02T17:42:44Z |
| indexdate | 2024-07-09T20:58:12Z |
| institution | BVB |
| isbn | 0132289148 |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-015674207 |
| oclc_num | 150247900 |
| open_access_boolean | |
| owner | DE-Aug4 DE-521 DE-19 DE-BY-UBM DE-188 |
| owner_facet | DE-Aug4 DE-521 DE-19 DE-BY-UBM DE-188 |
| physical | getr. Zählung Ill., graph. Darst. |
| publishDate | 2007 |
| publishDateSearch | 2007 |
| publishDateSort | 2007 |
| publisher | Pearson/Prentice Hall |
| record_format | marc |
| spelling | Case, Karl E. 1946- Verfasser (DE-588)131833197 aut Principles of economics Karl E. Case ; Ray C. Fair 8. ed. Upper Saddle River, NJ u.a. Pearson/Prentice Hall 2007 getr. Zählung Ill., graph. Darst. txt rdacontent n rdamedia nc rdacarrier Economie gtt Wirtschaft Economics Wirtschaftswissenschaften (DE-588)4066528-8 gnd rswk-swf Volkswirtschaftslehre (DE-588)4078943-3 gnd rswk-swf (DE-588)4123623-3 Lehrbuch gnd-content Leermiddelen (vorm) gtt Volkswirtschaftslehre (DE-588)4078943-3 s DE-604 Wirtschaftswissenschaften (DE-588)4066528-8 s 1\p DE-604 Fair, Ray C. 1942- Verfasser (DE-588)131833251 aut HBZ Datenaustausch application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=015674207&sequence=000001&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis 1\p cgwrk 20201028 DE-101 https://d-nb.info/provenance/plan#cgwrk |
| spellingShingle | Case, Karl E. 1946- Fair, Ray C. 1942- Principles of economics Economie gtt Wirtschaft Economics Wirtschaftswissenschaften (DE-588)4066528-8 gnd Volkswirtschaftslehre (DE-588)4078943-3 gnd |
| subject_GND | (DE-588)4066528-8 (DE-588)4078943-3 (DE-588)4123623-3 |
| title | Principles of economics |
| title_auth | Principles of economics |
| title_exact_search | Principles of economics |
| title_exact_search_txtP | Principles of economics |
| title_full | Principles of economics Karl E. Case ; Ray C. Fair |
| title_fullStr | Principles of economics Karl E. Case ; Ray C. Fair |
| title_full_unstemmed | Principles of economics Karl E. Case ; Ray C. Fair |
| title_short | Principles of economics |
| title_sort | principles of economics |
| topic | Economie gtt Wirtschaft Economics Wirtschaftswissenschaften (DE-588)4066528-8 gnd Volkswirtschaftslehre (DE-588)4078943-3 gnd |
| topic_facet | Economie Wirtschaft Economics Wirtschaftswissenschaften Volkswirtschaftslehre Lehrbuch Leermiddelen (vorm) |
| url | http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=015674207&sequence=000001&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA |
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