Verfügbarkeit: Microeconomics

Microeconomics: theory & applications

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1. Verfasser:	Browning, Edgar K. (VerfasserIn)
Format:	Buch
Sprache:	English
Veröffentlicht:	Hoboken, NJ Wiley 2009
Ausgabe:	10. ed., internat. student version
Schlagworte:	Microeconomics Microeconomics > Examinations, questions, etc Mikroökonomie Einführung
Online-Zugang:	Inhaltsverzeichnis
Beschreibung:	Previous ed.: 2006
Beschreibung:	XX, 618 S. ill
ISBN:	9780470414392

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Datensatz im Suchindex

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adam_text	Table of Contents Preface ........... Acknowledgments Chapter ι: Microeconomics: An Introduction ι 1.1 The Scope of Microeconomic Theory ......2 1.2 The Nature and Role of Theory ..........2 What Is a Good Theory? 3 1.3 Positive Versus Normative Analysis ......4 1.4 Market Analysis and Real Versus Nominal Prices ................................5 Application 1.1 The Old Rich Versus the New Rich: A Real Comparison ................6 1.5 Basic Assumptions about Market Participants ...........................6 1.6 Opportunity Cost ......................7 Application 1.2 Why the Early Bird Gets the Greater Returns from a Full-Time MBA Education ............................7 Application 1.3 Opportunity Cost (and Outsourcing) Hits Home ............8 Economic Versus Accounting Costs 9 Application 1.4 The Accounting and Economic Costs of SOX .................9 Sunk Costs 10 Application 1.5 Why It Was Profitable to Demolish a Profitable Hong Kong Hotel .10 1.7 Production Possibility Frontier ..........10 Chapter 2: Demand and Supply 2.1 Demand and Supply Curves ............16 The Demand Curve 16 Application 2.1 Increasing Unemployment via the Law of Demand ................18 Determinants of Demand Other Than Price 18 Shifts in Versus Movements along a Demand Curve 20 Application 2.2 Movies and Mayhem .....21 The Supply Curve 21 Shirts in Versus Movements along a Supply Curve ........22 2.2 Determination of Equilibrium Price and Quantity .........................23 Application 2.3 From Disequilibrium to Equilibrium in the Markets for Miley and Wii .............................24 2.3 Adjustment to Changes in Demand or Supply ............................25 Application 2.4 Hotel Rates in Mumbai ... 26 Using the Supply-Demand Model to Explain Market Outcomes 27 Application 2.5 Why Are Americans Getting Fatter? ..............................28 2.4 Government Intervention in Markets: Price Controls ........................29 Rent Control 30 Who Loses, Who Benefits? 31 Application 2.6 Why the Doctor Is Not In. .33 Application 2.7 Price Ceilings Can Be Deadly for Buyers .....................34 2.5 Elasticities ...........................34 Price Elasticity of Demand 35 Calculating Price Elasticity of Demand 37 Application 2.8 Demand Elasticity and Cable Television Pricing .....................38 Demand Elasticities Vary among Goods 39 Application 2.9 D.C. Learns about Demand Elasticity ............................39 The Estimation of Demand Elasticities 40 Three Other Elasticities 40 Application 2.10 It Takes Time 42 2.6 The Mathematics Associated with Elasticities .......................43 15 Chapter 3: Consumer Choice Theory 3.1 Consumer Preferences .................50 Consumer Preferences Graphed as Indifference Curves 51 Curvature of Indifference Curves 53 Individuals Have Different Preferences 55 Graphing Economic Bads and Economic Neuters 56 Perfect Substitutes and Complements 57 3.2 The Budget Constraint ................58 Geometry of the Budget Line 60 Shifts in Budget Lines 60 Application 3.1 BK Versus KFC in the UK in the Wake of BSE ...................... 62 • Table of Contents Xiii 3.3 The Consumer s Choice ...............63 A Corner Solution 64 Application 3.2 Chicken-Free Chicken Restaurants ..........................65 The Composite-Good Convention 66 3.4 Changes in Income and Consumption Choices .............................67 Normal Goods 69 Inferior Goods 69 The Food Stamp Program 71 Application 3.3 The Allocation of Commencement Tickets ................73 3.5 Are People Selfish? ....................74 Application 3.4 Is Altruism a Normal Good? ...............................76 3.6 The Utility Approach to Consumer Choice ..............................77 The Consumer s Optimal Choice 78 Relationship to Indifference Curves 79 3.7 The Mathematics Behind Consumer Choice ..............................80 Preferences of the Consumer 80 The Budget Constraint 81 The Consumer s Choice 81 Chapter 4: Demand: Individual and Market 85 4.1 Price Changes and Consumption Choices. .. 86 The Consumer s Demand Curve 88 Some Remarks about the Demand Curve 88 Application 4.7 Using Price to Deter Youth Alcohol Abuse, Traffic Fatalities, and Campus Violence ..................89 Do Demand Curves Always Slope Downward? 90 4.2 Income and Substitution Effects of a Price Change ..............................90 Income and Substitution Effects Illustrated: The Normal-Good Case 91 Application 4.2 Income and Substitution Effects and Home Ownership ...........93 The Income and Substitution Effects Associated with a Gasoline Tax-Plus-Rebate Program 93 A Graphical Examination or a Tax-Plus-Rebate Program 94 4.3 Income and Substitution Effects: Inferior Goods ...............................96 A Hypothetical Example of a Giffen Good 98 The Giffen Good Case: How Likely? 98 4.4 From Individual to Market Demand ......99 Application 4.3 Aggregating Demand Curves for a UCLA MBA ...............100 4.5 Consumer Surplus ...................101 The Uses of Consumer Surplus 104 Application 4.4 The Consumer Surplus Associated with Free TV ........105 Consumer Surplus and Indifference Curves 105 Application 4.5 The Benefits of Health Improvements .......................107 4.6 Price Elasticity and the Price-Consumption Curve ..............................107 4.7 Network Effects .....................109 The Bandwagon Effect 109 The Snob Effect 110 Application 4.6 Network Effects and the Diffusion of Communications Technologies and Computer Hardware and Software .......................112 4.8 The Basics of Demand Estimation ...... Ili Experimentation 1 1 і Siirvcv-. I I і Regression Analysis 114 Application 4,7 When Shouhi theCMAT? ..........................117 4.9 Deriving the Consumer s Demand Curve Mathematically .....................117 Chapter 5: Consumer Choice Theory Applications 12г 5.1 Excise Subsidies, Health Care, and Consumer Welfare ................... I 2 і Using the Consumer Surplus Approach 1 26 Application 5. Ї Burning Up Resource , in Moscow .......................... 1 27 5.2 Public Schools and the Voucher Proposal ............................1 28 Using Consumer Choice Theory to Analyze Voucher Proposals 1 30 Application 5.2 The Demand for and Supply of School Choice ....................131 5.3 Paying for Garbage ...................132 Does Everyone Benefit? 1 34 Application 5.3 Trash Pricing and Recycling .......................13 S 5.4 The Consumer s Choice to Save or Borrow .......................... I ÍS A Change in Endowment 1 37 Application 5.4 Social Security and Saving ............................. I 50. Changes in the Interest Rate 1 39 xiv Table of Contents · 5.5 Investor Choice .....................142 Application 5.5 Entrepreneurs and Their Risk-Return Preferences ......143 Investor Preferences toward Risk: Risk Aversion 144 Investor Preferences toward Risk: Risk Neutral and Risk Loving 146 Application 5.6 Risk Aversion While Standing in Line .....................147 Minimizing Exposure to Risk 148 Chapter 6: Consumer Exchange and Efficiency 152 6.1 Two-Person Exchange ................153 The Edgeworth Exchange Box Diagram 155 The Edgeworth Exchange Box with Indifference Curves 156 Application 6.1 The Benefits of Exchange and eBay ...........................158 6.2 Efficiency in the Distribution of Goods ..159 Efficiency and Equity 161 Application 6.2 The Kyoto Protocol and the Global Carbon Market ...............162 6.3 Competitive Equilibrium and Efficient Distribution ........................163 Application 6.3 Should Ticket Scalpers Be Disparaged or Deified? ...............166 6.4 Price and Nonprice Rationing and Efficiency .......................167 Application 6.4 The Benefits and Costs of Rationing by Waiting .................169 6.5 Some of the Mathematics Behind Efficiency in Exchange ................170 Chapter 7: The Theory of Production 174 7.1 Relating Output to Inputs .............175 7.2 Production When Only One Input Is Variable: The Short Run ..............176 Total, Average, and Marginal Product Curves 178 The Relationship Between Average and Marginal Product Curves 178 Application 7. 1 What the Marginal-Average Relationship Means for Your Grade Point Average (GPA) .......................180 The Geometry of Product Curves 180 The Law of Diminishing Marginal Returns 181 Application 7.2 The Law of Diminishing Marginal Returns, Caffeine Intake, and Exam Performance ...............182 7.3 Production When All Inputs Are Variable: The Long Run ......................183 Production Isoquants 183 MRTS and the Marginal Products of Inputs 186 Using MRTS: Speed Limits and Gasoline Consumption 186 7.4 Returns to Scale .....................188 Factors Giving Rise to Increasing Returns 188 Factors Giving Rise to Decreasing Returns 189 Application 7.3 Why Oil Shippers Compartmentalized Their Firms and Fliers Started Building Their Own Planes ......190 7.5 Functional Forms and Empirical Estimation of Production Functions ..............191 Linear Forms of Production Functions 192 Multiplicative Forms of Production Functions: Cobb—Douglas as an Example 193 Application 7.4 Cobb-Douglas Meets Romeo-Juliet .......................195 7.6 The Mathematics behind Production Theory .............................195 Marginal-Average Product Relationship 195 MRTS and the Ratio of Inputs Marginal Products 196 Some Additional Properties of Constant Returns to Scale Production Functions 197 Chapter 8: Production Costs 201 8.1 The Nature of Cost ..................202 8.2 Short-Run Cost of Production .........203 Measures of Short-Run Cost: Total Fixed and Variable Costs 204 Fixed Versus Sunk Costs 204 Five Other Measures of Short-Run Cost 205 Behind Cost Relationships 205 8.3 Short-Run Cost Curves ...............206 Marginal Cost 208 Average Cost 209 Application 8.1 The Effect of Wal-Mart on Retailing Productivity, Costs, and Prices ..........................210 Marginal-Average Relationships 210 The Geometry of Cost Curves 211 8.4 Long-Run Cost of Production ..........212 Isocost Lines 212 Least Costly Input Combinations 213 Interpreting the Tangency Points 214 • Table of Contents XV Application 8.2 American Airlines and Cost Minimization ...................215 The Expansion Path 216 Is Production Cost Minimized? 216 Application 8.3 Privatization and Productivity .........................217 8.5 Input Price Changes and Cost Curves ... 218 Application 8.4 The Economics of Raising and Razing Buildings .................219 Application 8.5 Why the Necks Are Thicker in New Haven ................220 Application 8.6 The Effect of 9-11 on U.S. Production Costs .....................221 8.6 Long-Run Cost Curves ...............221 The Long Run and the Short Run Revisited 223 8.7 Learning by Doing ...................224 The Advantages of Learning by Doing to Pioneering Firms 225 Application 8.7 Learning by Doing and the Model Τ .....................226 8.8 Importance of Cost Curves to Market Structure ...........................226 Application 8.8 Minimum Efficient Scales in Suds, Suits, and Soň Drinks .........228 8.9 Using Cost Curves: Controlling Pollution .................229 Application 8.9 The Cost of Dealing with Global Warming .....................231 8.10 Economies of Scope ..................232 8.11 Estimating Cost Functions .............233 8. 12 The Mathematics Behind Production Cost .....................234 The Marginal-Average Cost Relationship 234 Cost Minimization 235 Minimizing the Cost of Pollution Abatement 2 36 Chapter 9: Perfect Competition and Profit Maximization 240 9.1 The Assumptions of Perfect Competition ........................241 9.2 Profit Maximization ..................243 9.3 The Demand Curve Facing the Competitive Firm ....................244 9.4 Short-Run Profit Maximization .........246 Short-Run Profit Maximization Using Per-Unit Curves 248 Application 9.1 The Importance of Thinking at the Relevant Margin ...............249 Operating at a Loss in the Short Run 250 9.5 The Perfectly Competitive Firm s Short-Run Supply Curve ..............251 Application 9.2 The Method to Mothballing .........................253 Application 9.3 The Competitive Firm s Supply Curve in the Very Short Run .....253 Output Response to a Change in Input Prices 254 9.6 The Short-Run Industry Supply Curve .255 Price and Output Determination in the Short Run 256 9.7 Long-Run Competitive Equilibrium .....257 Zero Profit When Firms Cost Curves Differ? 259 9.8 The Long-Run Industry Supply Curve. . . 261 Constant-Cost Industry 261 Increasing-Cost Industry 263 Decreasing-Cost Industry 264 Application 9.4 The Bidding War for Finance Professors ..........................266 Comments on the Long-Run Supply Curve 266 Application 9.5 Cashing in on Corn .....268 9.9 When Does the Competitive Model Apply? .............................269 9.10 The Mathematics Behind Perfect Competition .........................270 Chapter 10: Applying the Competitive Model 275 10.1 The Evaluation of Gains and Losses .....276 Producer Surplus 277 Consumer Surplus, Producer Surplus, and Efficient Output 278 The Deadweight Loss of a Price Ceiling 280 10.2 Excise Taxation .....................282 The Short-Run Effects of an Excise Tax 283 The Long-Run Effects 284 Who Rears the Burden of the Tax. 285 Tax Incidence: The Effect of Elasticity of Supply 286 Application 10.1 Relative Ability to Run and Tax Incidence ...................287 Tax Incidence: The Effect of Elasticity ot Demand 288 The Deadweight Loss of Excise Taxation 288 Application 10.2 The Long and the Short (Run) of the Deadweight Loss of Rent Control .............................240 10.3 Airline Regulation and Deregulation .... 291 What Happened to the Profits? 292 After Deregulation 293 xvi Table of Contents · Application 10.3 The Contestability of Airline Markets ......................294 The Push for Reregulation 295 Application 10.4 Languish and Anguish at LaCuardia ..........................297 10.4 City Taxicab Markets .................297 The Illegal Market 299 10.5 Consumer and Producer Surplus, and the Net Gains from Trade ................300 The Gains from International Trade 302 Application 10.5 Should Trade s Winners Compensate the Losers? ..............304 The Link Between Imports and Exports 304 Application 10.6 Protecting Steel Jobs Steals Jobs ..........................305 10.6 Government Intervention in Markets: Quantity Controls ...................306 Sugar Policy: A Sweet Deal 306 Application 10.7 Why Sugar Import Quotas Were Job Losers with Respect to LifeSavers ........................308 Quotas and Their Foreign Producer Consequences 309 Chapter n: The Theory of Monopoly 312 11.1 The Monopolist s Demand and Marginal Revenue Curves .....................313 11.2 Profit-Maximizing Output of a Monopoly ..........................315 Graphical Analysis 316 The Monopoly Price and Its Relationship to Elasticity of Demand 318 Application 11.1 Demand Elasticity and DVD Prices ..........................321 11.3 Further Implications of Monopoly Analysis ............................321 Application 11.2 Life Is Not Always a Box of Chocolates .......................324 11.4 The Measurement and Sources of Monopoly Power ..............................325 Measuring Monopoly Power 326 The Sources of Monopoly Power 326 Barriers to Entry 327 Strategic Behavior by Firms: Incumbents and Potential Entrants 328 Application 11.3 March Monopoly Madness ...........................329 11.5 The Efficiency Effects of Monopoly .....331 A Dynamic View of Monopoly and Its Efficiency Implications 333 11.6 Public Policy Toward Monopoly ........335 Application 11.4 What Not to Say to a Rival on the Telephone ...............336 Application 11.5 Static Versus Dynamic Views of Monopoly and the Microsoft Antitrust Case .......................337 Regulation of Price 337 1 1.7 The Mathematics Behind Monopoly .....339 The Monopolist s Demand and Marginal Revenue Curves 339 Application 11.6 Efficiency and the Regulation of Pharmaceutical Drug Prices in the European Union and the United States ........................340 The Monopolist s Profit-Maximizing Output Choice 341 Chapter 12: Monopoly Power and Product Price Discrimination 344 12.1 Price Discrimination .................346 First-Degree Price Discrimination 346 Implementing First-Degree Price Discrimination 347 Second-Degree Price Discrimination 348 Application 12.1 Giving Frequent Shoppers the Second Degree ...................349 Third-Degree Price Discrimination 349 Application 12.2 The Third Degree by Car Dealers ............................350 12.2 Three Necessary Conditions for Price Discrimination ......................350 Application 12.3 Cray Hairs and Cray Markets ............................351 12.3 Price and Output Determination with Price Discrimination .................352 Application 12.4 The Cost of Being Earnest When It Comes to Applying to Colleges .........................355 12.4 Intertemporal Price Discrimination and Peak-Load Pricing ...................356 Application 12.5 Yield Management by Airlines ............................358 Peak-Load Pricing 358 Application 12.6 Priceline, Project Purple Demon, and Online Intertemporal Price Discrimination ......................359 The Advantages of Peak-Load Pricing 361 12.5 Two-Part Tariffs ....................362 Many Consumers, Different Demands 364 • Table of Contents XVII Application 12.7 The Costs of Engaging in Price Discrimination ..................366 12.6 The Mathematics Behind Price Discrimination ......................367 Chapter 13: Monopolistic Competition, Oligopoly, and Cartel Models 371 13.1 Price and Output under Monopolistic Competition ........................372 Determination of Market Equilibrium 373 Monopolistic Competition and Efficiency 375 Is Government Intervention Warranted? 377 Application 13.1 Restaurants: Monopolistic Competitors Near You ................377 13.2 Oligopoly and the Cournot Model ......378 The Cournot Model 379 Reaction Curves 381 Evaluation of the Cournot Model 382 Application 13.2 A Graphical and Mathematical Analysis of Cournot Equilibrium .........................382 13.3 Other Oligopoly Models ...............384 The Stackelberg Model 384 Application 13.3 More on Vitamin Water and the Graphics and Mathematics of the Stackelberg Model ...................386 The Dominant Firm Model 387 The Elasticity of the Dominant Firm s Demand Curve 388 Application 13.4 The Dynamics of the Dominant Firm Model in Pharmaceutical Markets ............................389 13.4 Cartels and Collusion .................390 Cartelization of a Competitive Industry 390 Application 13.5 Will the Internet Promote Competition or Cartelization? ..........391 Why Cartels Fail 392 Application 13.6 The Difficulty of Controlling Cheating ...........................394 Application 13.7 The Rolex Cartel .....394 Oligopolies and Collusion 395 The Case of OPEC 396 The Reasons for OPEC s Early Success 397 The Rest of the OPEC Story 398 Chapter 14: Game Theory and Information Economics 403 14.1 Game Theory .......................405 Determination of Equilibrium 405 Application 14.1 Dominant Strategies in Baseball ...........................407 Nash Equilibrium 407 14.2 The Prisoner s Dilemma Game .........409 Application 14.2 The Congressional Prisoner s Dilemma ..................410 The Prisoner s Dilemma and Cheating by Cartel Members 411 A Prisoner s Dilemma Game You May Play 413 14.3 Repeated Games .....................414 Application 14.3 Cooperation in the Trenches of World War I ......................416 Application 14.4 Cooperative Lawyers? .417 Do Oligopolistic Firms Always Collude? 417 Application 14.5 The Prisoner s Dilemma and Why Cheating by Corporate Leaders May Have Increased ......................418 Game Theory and Oligopoly: A Summary 419 14.4 Asymmetric Information ..............419 The Lemons Model 420 Market Responses to Asymmetric Information 421 The Relevance of the Lemons Model 422 Is There a Lemons Problem in Used Car Markets? 422 Application 14.6 Job Market Signaling ...........................423 14.5 Adverse Selection and Moral Hazard .............................423 Adverse Selection 424 Market Responses to Adverse Selection 424 Application 14.7 Adverse Selection and the American Red Cross ..................425 Moral Hazard 425 Application 14.8 Moral Hazard and Subprime Home Mortgages ...........426 Market Responses to Moral Hazard 427 Application 14.9 Moral Hazard on the Road and at the Plate ................427 14.6 Limited Price Information .............428 The Effect of Search Intensity on Price Dispersion 429 Application 14.10 The Internet and the Price of Life Insurance .............429 14.7 Advertising .........................4 Ю Advertising as Information 4Ю Advertising and Its Effects on Products Prices and Qualities 431 Advertising, the Full Price of a Product, and Market Efficiency 432 xvi Table of Contents · Chapter 15: Noncompetitive Market Model Applications 435 15.1 The Size of the Deadweight Loss of Monopoly ..........................436 Why Are the Estimates of the Deadweight Loss Not Large? 438 Other Possible Deadweight Losses of Monopoly 439 15.2 Do Monopolies Suppress Inventions? .... 440 The Effect of Inventions on Output 441 Application 15.1 Hollywood and Home Entertainment .......................443 15.3 Natural Monopoly ...................443 Regulation of Natural Monopoly. Theory 445 Regulation of Natural Monopoly: Practice 446 Application 15.2 Regulating Natural Monopoly Through Public Ownership: The Case ofUSPS ....................447 15.4 More on Game Theory: Iterated Dominance and Commitment ....................447 Iterated Dominance 448 Application 15.3 Iterating toward an Airline Market Equilibrium ..................450 Commitment ........................452 Application 15.4 Why It May Be Wise to Burn Your Ships ..........................453 Chapter 16: The Theory of Input Demand and Pricing 456 16.1 The Input Demand Curve of a Competitive Firm ...............................457 The Firm s Demand Curve: One Variable Input 458 The Firm s Demand Curve: All Inputs Variable 460 The Firm s Demand Curve: An Alternative Approach 461 Τ 6.2 Industry and Market Demand Curves for an Input .........................46 3 A Competitive Industry s Demand Curve for an Input 463 The Elasticity ot an Industry s Demand Curve for an Input 464 Application 16.1 Explaining Sky-High Pilot Salaries under Airline Regulation ..........................465 The Market Demand Curve tor an Input 466 16.3 The Supply of Inputs .................466 16.4 Industry Determination of Price and Employment of Inputs ................468 Process of Input Price Equalization across Industries 469 16.5 Input Price Determination in a Multi- Industry Market .....................471 16.6 Input Demand and Employment by an Output Market Monopoly .............474 16.7 Monopsony in Input Markets ..........476 Application 16.2 Major League Monopsony .........................477 *1 6.8 The Calculus Behind Input Demand by Competitive and Monopoly Firms .......478 Input Demand of a Competitive Firm 478 Input Demand by an Ouput Market Monopoly 478 Chapter 17: The Returns to Input Supply 482 17.1 The Income-Leisure Choice of the Worker .......................483 Is This Model Plausible? 485 17.2 The Supply of Hours of Work .........486 Is a Backward-Bending Labor Supply Curve Possible? 487 Application 17.1 An Example of a Backward-Bending Labor Supply Curve: The Work Effort Choices of Dentists Versus Physicians ....................488 Application 17.2 The Stresses Associated with Greater Leisure ..................489 The Market Supply Curve 490 Application 17.3 Why Do Americans Work More Than Europeans? ...............491 17.3 The General Level of Wage Rates ......491 Application 17.4 The Malaise of the 1970s...........................493 17.4 Why Wages Differ ...................495 Compensating Wage Differentials 495 Application 17.5 Twelve Hours Pay for Ten Minutes Work .......................496 Differences in Human Capital Investment 496 Application 17.6 The Returns to Investing in a BA and an MBA ..................497 Differences in Ability 497 Application 17.7 What s on the Outside Also Counts .........................498 17.5 Economic Rent ......................498 17.6 Monopoly Power in Input Markets: The Case of Unions ..................500 • Table of Contents xix Some Alternative Views of Unions and an Assessment of the Impact of Unions on Worker Productivity 502 Application 17.8 The Decline and Rise of Unions .............................503 17.7 Borrowing, Lending, and the Interest Rate ...............................504 17.8 Investment and the Marginal Productivity of Capital ................505 The Investment Demand Curve 506 17.9 Saving, Investment, and the Interest Rate . 508 Equalization of Rates of Return 509 17.10 Why Interest Rates Differ .............510 Chapter i8: Applications of Input Market Theory 513 18.1 The Minimum Wage .................514 Further Considerations 516 Does the Minimum Wage Harm the Poor? 517 The Minimum Wage: An Example of an Efficiency Wage? 519 Application 18.1 The Disemployment Effect of the 1990-1991 Minimum Wage Hike ___520 18.2 Who Really Pays for Social Security?. ... 521 But Do Workers Bear All the Burden? 522 18.3 The Hidden Cost of Social Security .....524 The Rest of the Story 526 The Effect on Labor Markets 527 18.4 The NCAA Cartel ...................528 An Input Buyers Cartel 528 The NCAA as a Cartel of Buyers 530 Eliminate the Cartel Restrictions on Pay? 531 Application 18.2 The Collusion Era in Major League Baseball ...............533 Application 18.3 Price Fixing in Fashion Modeling ...........................533 18.5 Discrimination in Employment .........534 What Causes Average Wage Rates to Differ? 537 Application 18.4 Male Versus Female Earnings Among Self-Employed Workers 538 18.6 The Benefits and Costs of Immigration . . 538 More on Gains and Losses 541 Chapter 19: Economic Efficiency and General Equilibrium Analysis 545 19.1 Partial and General Equilibrium Analysis Compared ..........................547 The Mutual Interdependence of Markets Illustrated 547 When Should General Equilibrium Analysis Be Used? 549 19.2 Economic Efficiency ..................550 Efficiency as a Goal for Economic Performance 551 Application 19.1 Land of the Free (Markets?) ..........................552 19.3 Conditions for Economic Efficiency .....553 19.4 Efficiency in Production ..............553 The Edgeworth Production Box 554 The Production Contract Curve and Efficiency in Production 555 General Equilibrium in Competitive Input Markets 556 19.5 The Production Possibility Frontier and Efficiency in Output ..................557 Efficiency in Output 559 An Economy s PPF and the Gains from International Trade 560 Application 19.2 The Effects of Trade Restrictions on an Economy s Consumption and Production Possibilities ...........562 19.6 Competitive Markets and Economic Efficiency ...........................563 The Role of Information 564 Application 19.3 Can Centralized Planning Promote Efficiency? ..................565 19.7 The Causes of Economic I nefficiency ..........................566 Market Power 566 Imperfect Information 567 Application 19.4 Deterring Cigarette Smoking ...........................568 Externalities/Public Goods 569 Chapter 20: Market Failure and Remedies 571 20.1 What Are Public Goodsľ ..............573 The Free-Rider Problem 574 Application 20.1 An Online Horror Tale .. 574 Free Riding and Group Size 575 20.2 Efficiency in the Provision of a Public Good ..............................575 Efficiency in Production and Distribution 577 Application 20.2 The Low-Down on Why Lojack Is Underprovided ..............578 Patents 578 20.3 Externalities ........................579 Externalities and Efficiency 580 External Costs 580 XX ______________________________________________________________________________ Table of Contents 9 Application 20.3 Traffic Externalities: Their Application 20.7 The Costs of Not Permitting Causes and Some Potential Cures ......582 Tradable Property Rights ..............589 Application 20.4 Non-Free California 20.5 Controlling Pollution, Revisited ........590 Freeways ...........................583 The Market for Los Angeles Smog 592 External Benefits 583 Application 20.5 Should Cell Phone Use Answers to Selected Problems .............597 While Driving Be Banned? .............585 20.4 Externalities and Property Rights .......585 Glossary .................................605 The Coase Theorem 587 Application 20.6 Making Telemarketers Index ....................................612 Pay ................................588
adam_txt	Table of Contents Preface . Acknowledgments Chapter ι: Microeconomics: An Introduction ι 1.1 The Scope of Microeconomic Theory .2 1.2 The Nature and Role of Theory .2 What Is a Good Theory? 3 1.3 Positive Versus Normative Analysis .4 1.4 Market Analysis and Real Versus Nominal Prices .5 Application 1.1 The Old Rich Versus the New Rich: A Real Comparison .6 1.5 Basic Assumptions about Market Participants .6 1.6 Opportunity Cost .7 Application 1.2 Why the Early Bird Gets the Greater Returns from a Full-Time MBA Education .7 Application 1.3 Opportunity Cost (and Outsourcing) Hits Home .8 Economic Versus Accounting Costs 9 Application 1.4 The Accounting and Economic Costs of SOX .9 Sunk Costs 10 Application 1.5 Why It Was Profitable to Demolish a Profitable Hong Kong Hotel .10 1.7 Production Possibility Frontier .10 Chapter 2: Demand and Supply 2.1 Demand and Supply Curves .16 The Demand Curve 16 Application 2.1 Increasing Unemployment via the Law of Demand .18 Determinants of Demand Other Than Price 18 Shifts in Versus Movements along a Demand Curve 20 Application 2.2 Movies and Mayhem .21 The Supply Curve 21 Shirts in Versus Movements along a Supply Curve .22 2.2 Determination of Equilibrium Price and Quantity .23 Application 2.3 From Disequilibrium to Equilibrium in the Markets for Miley and Wii .24 2.3 Adjustment to Changes in Demand or Supply .25 Application 2.4 Hotel Rates in Mumbai . 26 Using the Supply-Demand Model to Explain Market Outcomes 27 Application 2.5 Why Are Americans Getting Fatter? .28 2.4 Government Intervention in Markets: Price Controls .29 Rent Control 30 Who Loses, Who Benefits? 31 Application 2.6 Why the Doctor Is Not In. .33 Application 2.7 Price Ceilings Can Be Deadly for Buyers .34 2.5 Elasticities .34 Price Elasticity of Demand 35 Calculating Price Elasticity of Demand 37 Application 2.8 Demand Elasticity and Cable Television Pricing .38 Demand Elasticities Vary among Goods 39 Application 2.9 D.C. Learns about Demand Elasticity .39 The Estimation of Demand Elasticities 40 Three Other Elasticities 40 Application 2.10 It Takes Time 42 2.6 The Mathematics Associated with Elasticities .43 15 Chapter 3: Consumer Choice Theory 3.1 Consumer Preferences .50 Consumer Preferences Graphed as Indifference Curves 51 Curvature of Indifference Curves 53 Individuals Have Different Preferences 55 Graphing Economic Bads and Economic Neuters 56 Perfect Substitutes and Complements 57 3.2 The Budget Constraint .58 Geometry of the Budget Line 60 Shifts in Budget Lines 60 Application 3.1 BK Versus KFC in the UK in the Wake of BSE . 62 • Table of Contents Xiii 3.3 The Consumer's Choice .63 A Corner Solution 64 Application 3.2 Chicken-Free Chicken Restaurants .65 The Composite-Good Convention 66 3.4 Changes in Income and Consumption Choices .67 Normal Goods 69 Inferior Goods 69 The Food Stamp Program 71 Application 3.3 The Allocation of Commencement Tickets .73 3.5 Are People Selfish? .74 Application 3.4 Is Altruism a Normal Good? .76 3.6 The Utility Approach to Consumer Choice .77 The Consumer's Optimal Choice 78 Relationship to Indifference Curves 79 3.7 The Mathematics Behind Consumer Choice .80 Preferences of the Consumer 80 The Budget Constraint 81 The Consumer's Choice 81 Chapter 4: Demand: Individual and Market 85 4.1 Price Changes and Consumption Choices. . 86 The Consumer's Demand Curve 88 Some Remarks about the Demand Curve 88 Application 4.7 Using Price to Deter Youth Alcohol Abuse, Traffic Fatalities, and Campus Violence .89 Do Demand Curves Always Slope Downward? 90 4.2 Income and Substitution Effects of a Price Change .90 Income and Substitution Effects Illustrated: The Normal-Good Case 91 Application 4.2 Income and Substitution Effects and Home Ownership .93 The Income and Substitution Effects Associated with a Gasoline Tax-Plus-Rebate Program 93 A Graphical Examination or a Tax-Plus-Rebate Program 94 4.3 Income and Substitution Effects: Inferior Goods .96 A Hypothetical Example of a Giffen Good 98 The Giffen Good Case: How Likely? 98 4.4 From Individual to Market Demand .99 Application 4.3 Aggregating Demand Curves for a UCLA MBA .100 4.5 Consumer Surplus .101 The Uses of Consumer Surplus 104 Application 4.4 The Consumer Surplus Associated with Free TV .105 Consumer Surplus and Indifference Curves 105 Application 4.5 The Benefits of Health Improvements .107 4.6 Price Elasticity and the Price-Consumption Curve .107 4.7 Network Effects .109 The Bandwagon Effect 109 The Snob Effect 110 Application 4.6 Network Effects and the Diffusion of Communications Technologies and Computer Hardware and Software .112 4.8 The Basics of Demand Estimation . Ili Experimentation 1 1 і Siirvcv-. I I і Regression Analysis 114 Application 4,7 When Shouhi theCMAT? .117 4.9 Deriving the Consumer's Demand Curve Mathematically .117 Chapter 5: Consumer Choice Theory Applications 12г 5.1 Excise Subsidies, Health Care, and Consumer Welfare . I 2 і Using the Consumer Surplus Approach 1 26 Application 5. Ї Burning Up Resource', in Moscow . 1 27 5.2 Public Schools and the Voucher Proposal .1 28 Using Consumer Choice Theory to Analyze Voucher Proposals 1 30 Application 5.2 The Demand for and Supply of School Choice .131 5.3 Paying for Garbage .132 Does Everyone Benefit? 1 34 Application 5.3 Trash Pricing and Recycling .13 S 5.4 The Consumer's Choice to Save or Borrow . I ÍS A Change in Endowment 1 37 Application 5.4 Social Security and Saving . I 50. Changes in the Interest Rate 1 39 xiv Table of Contents · 5.5 Investor Choice .142 Application 5.5 Entrepreneurs and Their Risk-Return Preferences .143 Investor Preferences toward Risk: Risk Aversion 144 Investor Preferences toward Risk: Risk Neutral and Risk Loving 146 Application 5.6 Risk Aversion While Standing in Line .147 Minimizing Exposure to Risk 148 Chapter 6: Consumer Exchange and Efficiency 152 6.1 Two-Person Exchange .153 The Edgeworth Exchange Box Diagram 155 The Edgeworth Exchange Box with Indifference Curves 156 Application 6.1 The Benefits of Exchange and eBay .158 6.2 Efficiency in the Distribution of Goods .159 Efficiency and Equity 161 Application 6.2 The Kyoto Protocol and the Global Carbon Market .162 6.3 Competitive Equilibrium and Efficient Distribution .163 Application 6.3 Should Ticket Scalpers Be Disparaged or Deified? .166 6.4 Price and Nonprice Rationing and Efficiency .167 Application 6.4 The Benefits and Costs of Rationing by Waiting .169 6.5 Some of the Mathematics Behind Efficiency in Exchange .170 Chapter 7: The Theory of Production 174 7.1 Relating Output to Inputs .175 7.2 Production When Only One Input Is Variable: The Short Run .176 Total, Average, and Marginal Product Curves 178 The Relationship Between Average and Marginal Product Curves 178 Application 7. 1 What the Marginal-Average Relationship Means for Your Grade Point Average (GPA) .180 The Geometry of Product Curves 180 The Law of Diminishing Marginal Returns 181 Application 7.2 The Law of Diminishing Marginal Returns, Caffeine Intake, and Exam Performance .182 7.3 Production When All Inputs Are Variable: The Long Run .183 Production Isoquants 183 MRTS and the Marginal Products of Inputs 186 Using MRTS: Speed Limits and Gasoline Consumption 186 7.4 Returns to Scale .188 Factors Giving Rise to Increasing Returns 188 Factors Giving Rise to Decreasing Returns 189 Application 7.3 Why Oil Shippers Compartmentalized Their Firms and Fliers Started Building Their Own Planes .190 7.5 Functional Forms and Empirical Estimation of Production Functions .191 Linear Forms of Production Functions 192 Multiplicative Forms of Production Functions: Cobb—Douglas as an Example 193 Application 7.4 Cobb-Douglas Meets Romeo-Juliet .195 7.6 The Mathematics behind Production Theory .195 Marginal-Average Product Relationship 195 MRTS and the Ratio of Inputs' Marginal Products 196 Some Additional Properties of Constant Returns to Scale Production Functions 197 Chapter 8: Production Costs 201 8.1 The Nature of Cost .202 8.2 Short-Run Cost of Production .203 Measures of Short-Run Cost: Total Fixed and Variable Costs 204 Fixed Versus Sunk Costs 204 Five Other Measures of Short-Run Cost 205 Behind Cost Relationships 205 8.3 Short-Run Cost Curves .206 Marginal Cost 208 Average Cost 209 Application 8.1 The Effect of Wal-Mart on Retailing Productivity, Costs, and Prices .210 Marginal-Average Relationships 210 The Geometry of Cost Curves 211 8.4 Long-Run Cost of Production .212 Isocost Lines 212 Least Costly Input Combinations 213 Interpreting the Tangency Points 214 • Table of Contents XV Application 8.2 American Airlines and Cost Minimization .215 The Expansion Path 216 Is Production Cost Minimized? 216 Application 8.3 Privatization and Productivity .217 8.5 Input Price Changes and Cost Curves . 218 Application 8.4 The Economics of Raising and Razing Buildings .219 Application 8.5 Why the Necks Are Thicker in New Haven .220 Application 8.6 The Effect of 9-11 on U.S. Production Costs .221 8.6 Long-Run Cost Curves .221 The Long Run and the Short Run Revisited 223 8.7 Learning by Doing .224 The Advantages of Learning by Doing to Pioneering Firms 225 Application 8.7 Learning by Doing and the Model Τ .226 8.8 Importance of Cost Curves to Market Structure .226 Application 8.8 Minimum Efficient Scales in Suds, Suits, and Soň Drinks .228 8.9 Using Cost Curves: Controlling Pollution .229 Application 8.9 The Cost of Dealing with Global Warming .231 8.10 Economies of Scope .232 8.11 Estimating Cost Functions .233 8. 12 The Mathematics Behind Production Cost .234 The Marginal-Average Cost Relationship 234 Cost Minimization 235 Minimizing the Cost of Pollution Abatement 2 36 Chapter 9: Perfect Competition and Profit Maximization 240 9.1 The Assumptions of Perfect Competition .241 9.2 Profit Maximization .243 9.3 The Demand Curve Facing the Competitive Firm .244 9.4 Short-Run Profit Maximization .246 Short-Run Profit Maximization Using Per-Unit Curves 248 Application 9.1 The Importance of Thinking at the Relevant Margin .249 Operating at a Loss in the Short Run 250 9.5 The Perfectly Competitive Firm's Short-Run Supply Curve .251 Application 9.2 The Method to Mothballing .253 Application 9.3 The Competitive Firm's Supply Curve in the Very Short Run .253 Output Response to a Change in Input Prices 254 9.6 The Short-Run Industry Supply Curve .255 Price and Output Determination in the Short Run 256 9.7 Long-Run Competitive Equilibrium .257 Zero Profit When Firms' Cost Curves Differ? 259 9.8 The Long-Run Industry Supply Curve. . . 261 Constant-Cost Industry 261 Increasing-Cost Industry 263 Decreasing-Cost Industry 264 Application 9.4 The Bidding War for Finance Professors .266 Comments on the Long-Run Supply Curve 266 Application 9.5 Cashing in on Corn .268 9.9 When Does the Competitive Model Apply? .269 9.10 The Mathematics Behind Perfect Competition .270 Chapter 10: Applying the Competitive Model 275 10.1 The Evaluation of Gains and Losses .276 Producer Surplus 277 Consumer Surplus, Producer Surplus, and Efficient Output 278 The Deadweight Loss of a Price Ceiling 280 10.2 Excise Taxation .282 The Short-Run Effects of an Excise Tax 283 The Long-Run Effects 284 Who Rears the Burden of the Tax.' 285 Tax Incidence: The Effect of Elasticity of Supply 286 Application 10.1 Relative Ability to "Run" and Tax Incidence .287 Tax Incidence: The Effect of Elasticity ot Demand 288 The Deadweight Loss of Excise Taxation 288 Application 10.2 The Long and the Short (Run) of the Deadweight Loss of Rent Control .240 10.3 Airline Regulation and Deregulation . 291 What Happened to the Profits? 292 After Deregulation 293 xvi Table of Contents · Application 10.3 The Contestability of Airline Markets .294 The Push for Reregulation 295 Application 10.4 Languish and Anguish at LaCuardia .297 10.4 City Taxicab Markets .297 The Illegal Market 299 10.5 Consumer and Producer Surplus, and the Net Gains from Trade .300 The Gains from International Trade 302 Application 10.5 Should Trade's Winners Compensate the Losers? .304 The Link Between Imports and Exports 304 Application 10.6 Protecting Steel Jobs Steals Jobs .305 10.6 Government Intervention in Markets: Quantity Controls .306 Sugar Policy: A Sweet Deal 306 Application 10.7 Why Sugar Import Quotas Were Job Losers with Respect to LifeSavers .308 Quotas and Their Foreign Producer Consequences 309 Chapter n: The Theory of Monopoly 312 11.1 The Monopolist's Demand and Marginal Revenue Curves .313 11.2 Profit-Maximizing Output of a Monopoly .315 Graphical Analysis 316 The Monopoly Price and Its Relationship to Elasticity of Demand 318 Application 11.1 Demand Elasticity and DVD Prices .321 11.3 Further Implications of Monopoly Analysis .321 Application 11.2 Life Is Not Always a Box of Chocolates .324 11.4 The Measurement and Sources of Monopoly Power .325 Measuring Monopoly Power 326 The Sources of Monopoly Power 326 Barriers to Entry 327 Strategic Behavior by Firms: Incumbents and Potential Entrants 328 Application 11.3 March Monopoly Madness .329 11.5 The Efficiency Effects of Monopoly .331 A Dynamic View of Monopoly and Its Efficiency Implications 333 11.6 Public Policy Toward Monopoly .335 Application 11.4 What Not to Say to a Rival on the Telephone .336 Application 11.5 Static Versus Dynamic Views of Monopoly and the Microsoft Antitrust Case .337 Regulation of Price 337 1 1.7 The Mathematics Behind Monopoly .339 The Monopolist's Demand and Marginal Revenue Curves 339 Application 11.6 Efficiency and the Regulation of Pharmaceutical Drug Prices in the European Union and the United States .340 The Monopolist's Profit-Maximizing Output Choice 341 Chapter 12: Monopoly Power and Product Price Discrimination 344 12.1 Price Discrimination .346 First-Degree Price Discrimination 346 Implementing First-Degree Price Discrimination 347 Second-Degree Price Discrimination 348 Application 12.1 Giving Frequent Shoppers the Second Degree .349 Third-Degree Price Discrimination 349 Application 12.2 The Third Degree by Car Dealers .350 12.2 Three Necessary Conditions for Price Discrimination .350 Application 12.3 Cray Hairs and Cray Markets .351 12.3 Price and Output Determination with Price Discrimination .352 Application 12.4 The Cost of Being Earnest When It Comes to Applying to Colleges .355 12.4 Intertemporal Price Discrimination and Peak-Load Pricing .356 Application 12.5 Yield Management by Airlines .358 Peak-Load Pricing 358 Application 12.6 Priceline, Project Purple Demon, and Online Intertemporal Price Discrimination .359 The Advantages of Peak-Load Pricing 361 12.5 Two-Part Tariffs .362 Many Consumers, Different Demands 364 • Table of Contents XVII Application 12.7 The Costs of Engaging in Price Discrimination .366 12.6 The Mathematics Behind Price Discrimination .367 Chapter 13: Monopolistic Competition, Oligopoly, and Cartel Models 371 13.1 Price and Output under Monopolistic Competition .372 Determination of Market Equilibrium 373 Monopolistic Competition and Efficiency 375 Is Government Intervention Warranted? 377 Application 13.1 Restaurants: Monopolistic Competitors Near You .377 13.2 Oligopoly and the Cournot Model .378 The Cournot Model 379 Reaction Curves 381 Evaluation of the Cournot Model 382 Application 13.2 A Graphical and Mathematical Analysis of Cournot Equilibrium .382 13.3 Other Oligopoly Models .384 The Stackelberg Model 384 Application 13.3 More on Vitamin Water and the Graphics and Mathematics of the Stackelberg Model .386 The Dominant Firm Model 387 The Elasticity of the Dominant Firm's Demand Curve 388 Application 13.4 The Dynamics of the Dominant Firm Model in Pharmaceutical Markets .389 13.4 Cartels and Collusion .390 Cartelization of a Competitive Industry 390 Application 13.5 Will the Internet Promote Competition or Cartelization? .391 Why Cartels Fail 392 Application 13.6 The Difficulty of Controlling Cheating .394 Application 13.7 The Rolex "Cartel" .394 Oligopolies and Collusion 395 The Case of OPEC 396 The Reasons for OPEC's Early Success 397 The Rest of the OPEC Story 398 Chapter 14: Game Theory and Information Economics 403 14.1 Game Theory .405 Determination of Equilibrium 405 Application 14.1 Dominant Strategies in Baseball .407 Nash Equilibrium 407 14.2 The Prisoner's Dilemma Game .409 Application 14.2 The Congressional Prisoner's Dilemma .410 The Prisoner's Dilemma and Cheating by Cartel Members 411 A Prisoner's Dilemma Game You May Play 413 14.3 Repeated Games .414 Application 14.3 Cooperation in the Trenches of World War I .416 Application 14.4 Cooperative Lawyers? .417 Do Oligopolistic Firms Always Collude? 417 Application 14.5 The Prisoner's Dilemma and Why Cheating by Corporate Leaders May Have Increased .418 Game Theory and Oligopoly: A Summary 419 14.4 Asymmetric Information .419 The "Lemons" Model 420 Market Responses to Asymmetric Information 421 The Relevance of the Lemons Model 422 Is There a Lemons Problem in Used Car Markets? 422 Application 14.6 Job Market Signaling .423 14.5 Adverse Selection and Moral Hazard .423 Adverse Selection 424 Market Responses to Adverse Selection 424 Application 14.7 Adverse Selection and the American Red Cross .425 Moral Hazard 425 Application 14.8 Moral Hazard and Subprime Home Mortgages .426 Market Responses to Moral Hazard 427 Application 14.9 Moral Hazard on the Road and at the Plate .427 14.6 Limited Price Information .428 The Effect of Search Intensity on Price Dispersion 429 Application 14.10 The Internet and the Price of Life Insurance .429 14.7 Advertising .4 Ю Advertising as Information 4Ю Advertising and Its Effects on Products' Prices and Qualities 431 Advertising, the Full Price of a Product, and Market Efficiency 432 xvi Table of Contents · Chapter 15: Noncompetitive Market Model Applications 435 15.1 The Size of the Deadweight Loss of Monopoly .436 Why Are the Estimates of the Deadweight Loss Not Large? 438 Other Possible Deadweight Losses of Monopoly 439 15.2 Do Monopolies Suppress Inventions? . 440 The Effect of Inventions on Output 441 Application 15.1 Hollywood and Home Entertainment .443 15.3 Natural Monopoly .443 Regulation of Natural Monopoly. Theory 445 Regulation of Natural Monopoly: Practice 446 Application 15.2 Regulating Natural Monopoly Through Public Ownership: The Case ofUSPS .447 15.4 More on Game Theory: Iterated Dominance and Commitment .447 Iterated Dominance 448 Application 15.3 Iterating toward an Airline Market Equilibrium .450 Commitment .452 Application 15.4 Why It May Be Wise to Burn Your Ships .453 Chapter 16: The Theory of Input Demand and Pricing 456 16.1 The Input Demand Curve of a Competitive Firm .457 The Firm's Demand Curve: One Variable Input 458 The Firm's Demand Curve: All Inputs Variable 460 The Firm's Demand Curve: An Alternative Approach 461 Τ 6.2 Industry and Market Demand Curves for an Input .46 3 A Competitive Industry's Demand Curve for an Input 463 The Elasticity ot an Industry's Demand Curve for an Input 464 Application 16.1 Explaining Sky-High Pilot Salaries under Airline Regulation .465 The Market Demand Curve tor an Input 466 16.3 The Supply of Inputs .466 16.4 Industry Determination of Price and Employment of Inputs .468 Process of Input Price Equalization across Industries 469 16.5 Input Price Determination in a Multi- Industry Market .471 16.6 Input Demand and Employment by an Output Market Monopoly .474 16.7 Monopsony in Input Markets .476 Application 16.2 Major League Monopsony .477 *1 6.8 The Calculus Behind Input Demand by Competitive and Monopoly Firms .478 Input Demand of a Competitive Firm 478 Input Demand by an Ouput Market Monopoly 478 Chapter 17: The Returns to Input Supply 482 17.1 The Income-Leisure Choice of the Worker .483 Is This Model Plausible? 485 17.2 The Supply of Hours of Work .486 Is a Backward-Bending Labor Supply Curve Possible? 487 Application 17.1 An Example of a Backward-Bending Labor Supply Curve: The Work Effort Choices of Dentists Versus Physicians .488 Application 17.2 The Stresses Associated with Greater Leisure .489 The Market Supply Curve 490 Application 17.3 Why Do Americans Work More Than Europeans? .491 17.3 The General Level of Wage Rates .491 Application 17.4 The Malaise of the 1970s.493 17.4 Why Wages Differ .495 Compensating Wage Differentials 495 Application 17.5 Twelve Hours'Pay for Ten Minutes' Work .496 Differences in Human Capital Investment 496 Application 17.6 The Returns to Investing in a BA and an MBA .497 Differences in Ability 497 Application 17.7 What's on the Outside Also Counts .498 17.5 Economic Rent .498 17.6 Monopoly Power in Input Markets: The Case of Unions .500 • Table of Contents xix Some Alternative Views of Unions and an Assessment of the Impact of Unions on Worker Productivity 502 Application 17.8 The Decline and Rise of Unions .503 17.7 Borrowing, Lending, and the Interest Rate .504 17.8 Investment and the Marginal Productivity of Capital .505 The Investment Demand Curve 506 17.9 Saving, Investment, and the Interest Rate . 508 Equalization of Rates of Return 509 17.10 Why Interest Rates Differ .510 Chapter i8: Applications of Input Market Theory 513 18.1 The Minimum Wage .514 Further Considerations 516 Does the Minimum Wage Harm the Poor? 517 The Minimum Wage: An Example of an Efficiency Wage? 519 Application 18.1 The Disemployment Effect of the 1990-1991 Minimum Wage Hike _520 18.2 Who Really Pays for Social Security?. . 521 But Do Workers Bear All the Burden? 522 18.3 The Hidden Cost of Social Security .524 The Rest of the Story 526 The Effect on Labor Markets 527 18.4 The NCAA Cartel .528 An Input Buyers'Cartel 528 The NCAA as a Cartel of Buyers 530 Eliminate the Cartel Restrictions on Pay? 531 Application 18.2 The "Collusion Era" in Major League Baseball .533 Application 18.3 Price Fixing in Fashion Modeling .533 18.5 Discrimination in Employment .534 What Causes Average Wage Rates to Differ? 537 Application 18.4 Male Versus Female Earnings Among Self-Employed Workers 538 18.6 The Benefits and Costs of Immigration . . 538 More on Gains and Losses 541 Chapter 19: Economic Efficiency and General Equilibrium Analysis 545 19.1 Partial and General Equilibrium Analysis Compared .547 The Mutual Interdependence of Markets Illustrated 547 When Should General Equilibrium Analysis Be Used? 549 19.2 Economic Efficiency .550 Efficiency as a Goal for Economic Performance 551 Application 19.1 Land of the Free (Markets?) .552 19.3 Conditions for Economic Efficiency .553 19.4 Efficiency in Production .553 The Edgeworth Production Box 554 The Production Contract Curve and Efficiency in Production 555 General Equilibrium in Competitive Input Markets 556 19.5 The Production Possibility Frontier and Efficiency in Output .557 Efficiency in Output 559 An Economy's PPF and the Gains from International Trade 560 Application 19.2 The Effects of Trade Restrictions on an Economy's Consumption and Production Possibilities .562 19.6 Competitive Markets and Economic Efficiency .563 The Role of Information 564 Application 19.3 Can Centralized Planning Promote Efficiency? .565 19.7 The Causes of Economic I nefficiency .566 Market Power 566 Imperfect Information 567 Application 19.4 Deterring Cigarette Smoking .568 Externalities/Public Goods 569 Chapter 20: Market Failure and Remedies 571 20.1 What Are Public Goodsľ .573 The Free-Rider Problem 574 Application 20.1 An Online Horror Tale . 574 Free Riding and Group Size 575 20.2 Efficiency in the Provision of a Public Good .575 Efficiency in Production and Distribution 577 Application 20.2 The Low-Down on Why Lojack Is Underprovided .578 Patents 578 20.3 Externalities .579 Externalities and Efficiency 580 External Costs 580 XX _ Table of Contents 9 Application 20.3 Traffic Externalities: Their Application 20.7 The Costs of Not Permitting Causes and Some Potential Cures .582 Tradable Property Rights .589 Application 20.4 Non-Free California 20.5 Controlling Pollution, Revisited .590 Freeways .583 The Market for Los Angeles Smog 592 External Benefits 583 Application 20.5 Should Cell Phone Use Answers to Selected Problems .597 While Driving Be Banned? .585 20.4 Externalities and Property Rights .585 Glossary .605 The Coase Theorem 587 Application 20.6 Making Telemarketers Index .612 Pay .588
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spelling	Browning, Edgar K. Verfasser aut Microeconomics theory & applications Edgar K. Browning ; Mark A. Zupan 10. ed., internat. student version Hoboken, NJ Wiley 2009 XX, 618 S. ill txt rdacontent n rdamedia nc rdacarrier Previous ed.: 2006 Microeconomics Microeconomics Examinations, questions, etc Mikroökonomie (DE-588)4039225-9 gnd rswk-swf (DE-588)4151278-9 Einführung gnd-content Mikroökonomie (DE-588)4039225-9 s DE-604 Zupan, Mark A. Sonstige oth Digitalisierung UB Bayreuth application/pdf http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016994301&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA Inhaltsverzeichnis
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subject_GND	(DE-588)4039225-9 (DE-588)4151278-9
title	Microeconomics theory & applications
title_auth	Microeconomics theory & applications
title_exact_search	Microeconomics theory & applications
title_exact_search_txtP	Microeconomics theory & applications
title_full	Microeconomics theory & applications Edgar K. Browning ; Mark A. Zupan
title_fullStr	Microeconomics theory & applications Edgar K. Browning ; Mark A. Zupan
title_full_unstemmed	Microeconomics theory & applications Edgar K. Browning ; Mark A. Zupan
title_short	Microeconomics
title_sort	microeconomics theory applications
title_sub	theory & applications
topic	Microeconomics Microeconomics Examinations, questions, etc Mikroökonomie (DE-588)4039225-9 gnd
topic_facet	Microeconomics Microeconomics Examinations, questions, etc Mikroökonomie Einführung
url	http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&local_base=BVB01&doc_number=016994301&sequence=000002&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA
work_keys_str_mv	AT browningedgark microeconomicstheoryapplications AT zupanmarka microeconomicstheoryapplications

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