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Economics, 6th Edition
Table of Contents
Note: Each chapter begins with a Preview and concludes with a Summary, Key Terms, Exercises, and an ACE Practice Test.
I. Introduction to the Price System
1. Economics: The World Around You
Why Study Economics?
The Definition of Economics
The Economic Approach
Economic Insight: "'Free' Air?"
Economically Speaking: "Choice of Major, Years of College Influence Student Debt"
Appendix to Chapter 1. Working with Graphs
Reading Graphs
Constructing a Graph
Slopes
2. Choice, Opportunity Costs, and Specialization
Opportunity Costs
Specialization and Trade
Economically Speaking: "Guns and Butter"
3. Markets, Demand and Supply, and the Price System
Markets
Demand
Supply
Equilibrium: Putting Demand and Supply Together
Global Business Insight: "The Foreign Exchange Market"
Economically Speaking: "A Sleuth for Landlords with Eviction in Mind"
4. The Market System and the Private Sector
The Market System
Households
Business Firms
The International Sector
Linking the Sectors
Economic Insight: "Adam Smith"
Economic Insight: "The Successful Entrepreneur (Sometimes It's Better to Be Lucky Than Good)"
Economical Speaking "Report: Ramsey Friend Sold Information to National Enquirer"
5. The Public Sector
The Circular Flow
The Role of Government in the Market System
Overview of the United States Government
Government in Other Economies
Global Business Insight: "Government Creates a Market for Fishing Rights"
Economically Speaking: "A Big "Nein" to Deutsche Telekom; Telecommunications: Germany Still Doesn't Have a Completely Open Market"
II. Macroeconomic Basics
6. National Income Accounting
Measures of Output and Income
Nominal and Real Measures
Flows of Income and Expenditures
Economic Insight: "The Consumer Price Index"
Economically Speaking: "Hiding in the Shadows: The Growth of the Underground Economy"
7. An Introduction to the Foreign Exchange Market and the Balance of Payments
The Foreign Exchange Market
The Balance of Payments
Global Business Insight: "Active Trading Around the World"
Global Business Insight: "The Euro"
Economically Speaking: "High Gas Prices, Weak Euro Result in Room Availability, Less-Crowded Facilities at Popular U.S. National Parks"
8. Unemployment and Inflation
Business Cycles
Unemployment
Inflation
Global Business Insight: "High Unemployment in Europe"
Economically Speaking: "Things Really Are Tight at Most Levels of Job Market"
9. Macroeconomic Equilibrium: Aggregate Demand and Supply
Aggregate Demand, Aggregate Supply, and Business Cycles
Factors That Influence Aggregate Demand
The Aggregate Demand Curve
Aggregate Supply
Aggregate Demand and Supply Equilibrium
Economic Insight: "How Lack of Information in the Short Run Affects Wages in the Long Run"
Global Business Insight: "Oil and Aggregate Supply"
Economically Speaking: "The Conference Board's Consumer Confidence Index Plummets Nearly 15 Points"
10. Aggregate Expenditures
Consumption and Saving
Investment
Government Spending
Net Exports
The Aggregate Expenditures Function
Economic Insight: "Permanent Income, Life Cycles, and Consumption"
Economically Speaking: "U.S. Trade Deficit in 2002 Largest in History"
Appendix to Chapter 10. An Algebraic Model of Aggregate Expenditures
11. Income and Expenditures Equilibrium
Equilibrium Income and Expenditures
Changes in Equilibrium Income and Expenditures
Aggregate Expenditures and Aggregate Demand
Economic Insight: "John Maynard Keynes"
Economic Insight: "The Paradox of Thrift"
Economically Speaking: "Mexico: Hostage to Its Neighbor's Troubles"
Appendix to Chapter 11. An Algebraic Model of Income and Expenditures Equilibrium
III. Macroeconomic Policy
12. Fiscal Policy
Fiscal Policy and Aggregate Demand
Fiscal Policy in the United States
Fiscal Policy in Different Countries
Economic Insight: "Supply-Side Economics and the Laffer Curve"
Economic Insight: "The Taxpayer's Federal Government Credit Card Statement"
Global Business Insight: "Value-Added Tax"
Economically Speaking: "Brussels Takes Action Against France over Budget Deficit"
Appendix to Chapter 12. An Algebraic Examination of the Balanced-Budget Change in Fiscal Policy
13. Money and Banking
What Is Money?
Banking
Banks and the Money Supply
Global Business Insight: "Islamic Banking"
Economically Speaking: "They Love Our Money"
14. Monetary Policy
The Federal Reserve System
Implementing Monetary Policy
Monetary Policy and Equilibrium Income
Economic Insight: "What's on a 20-Dollar Bill?"
Global Business Insight: "The European Central Bank"
Economically Speaking: "Fed Leaves Rates Alone, but Message Needs Translation: Strange Statement Puzzles Economists"
15. Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles
The Phillips Curve
The Role of Expectations
Credibility and Time Inconsistency
Sources of Business Cycles
The Link Between Monetary and Fiscal Policies
Economic Insight: "The Natural Rate of Unemployment"
Economic Insight: "Why Wages Don't Fall During Recessions"
Economically Speaking: "War Worries Hurting U.S. Markets: Fed Chief Greenspan Warns of Further Interest Rate Cuts if Sluggishness Continues"
16. Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical
Keynesian Economics
Monetarist Economics
New Classical Economics
Comparison and Influence
Economic Insight: "Milton Friedman"
Economically Speaking: "The Ghosts of Christmas Past Haunt Economists"
IV. Economic Growth and Development
17. Economic Growth
Defining Economic Growth
The Determinants of Growth
Productivity
Economic Insight: "Technological Advance: The Change in the Price of Light"
Economically Speaking: "U.S. Updating Its Economic Measurements"
18. Development Economics
The Developing World
Obstacles to Growth
Development Strategies
Foreign Investment and Aid
Economies in Transition from Socialism
Global Business Insight: "Economic Development in the Americas"
Economically Speaking: "Food Aid"
19. Globalization
The Meaning of Globalization
Globalization Controversy
Globalization, Economic Growth, and Incomes
Financial Crises and Globalization
Global Business Insight: "The World Trade Organization"
Economically Speaking: "Germans' Coziness Puts Nation at Risk"
V. Product Market Basics
20. Elasticity: Demand and Supply
The Price Elasticity of Demand
The Use of Price Elasticity of Demand
Determinants of the Price Elasticity of Demand
Other Demand Elasticities
Supply Elasticities
Global Business Insight: "Dumping"
Economically Speaking: "Higher Gas Prices Make Future Murky for Big SUVs: Impact of Rising Fuel Costs Could Be Bigger in Canada Than U.S."
21. Consumer Choice
Decisions
Utility and Choice
The Demand Curve Again
Economic Insight: "Does Money Buy Happiness?"
Economically Speaking: "Why Sudden Wealth Will Not Make You Happy"
Appendix to Chapter 21. Indifference Analysis
Indifference Curves
Budget Constraint
Consumer Equilibrium
22. Supply: The Costs of Doing Business
Firms and Production
From Production to Costs
Cost Schedules and Cost Curves
The Long Run
Economic Insight: "Overhead"
Economically Speaking: "Merge or Die"
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VI. Product Markets
23. Profit Maximization
Profit Maximization
Marginal Revenue and Marginal Cost
Selling Environments or Market Structure
Global Business Insight: "Brisk Business in Measuring Economic Profit"
Economically Speaking: "Business Ethics Guarantee Value to All Interested Parties"
24. Perfect Competition
The Perfectly Competitive Firm in the Short Run
The Long Run
Economically Speaking: "Avoid 'Commoditization'"
25. Monopoly
The Market Structure of Monopoly
The Demand Curve Facing a Monopoly Firm
Profit Maximization
Market Power and Price Discrimination
Comparison of Perfect Competition and Monopoly
Economically Speaking: "Conflict Diamonds; Americans Can Stop the Damage They Do"
26. Monopolistic Competition and Oligopoly
Monopolistic Competition
Oligopoly and Interdependence
Summary of Market Structures
Economic Insight: "The Prisoner's Dilemma"
Economically Speaking: "Authorities Gather to Combat Warring Drug Cartels"
27. Antitrust and Regulation
Antitrust Policy
Regulation
The Securities and Exchange Commission
Global Business Insight: "The California Debacle"
Economically Speaking: "Don't Let It Happen Again: Why Didn't the Post-'65 Fixes Stop This Blackout?"
28. Government and Market Failure
Externalities
Private Property Rights
Public Goods
Asymmetric Information
Government Failure
Global Business Insight: "Why Aren't Cows and Chickens on the Endangered Species List?"
Economically Speaking: "Bates College Students Retire Air Pollution Permit Worth a Ton of Sulphur Dioxide"
VII. Resource Markets
29. Resource Markets
Buyers and Sellers of Resources
The Market Demand for and Supply of Resources
How Firms Decide What Resources to Buy
Economic Insight: "The Company Town"
Economically Speaking: "Agent: Eagles, McNabb Agree to Deal Worth up to $115 Million"
30. The Labor Market
The Supply of Labor
Wage Differentials
Discrimination
Wage Differentials and Government Policies
Economic Insight: "The Overworked American"
Economically Speaking: "Higher Apathy"
31. Financial Markets: Institutions and Recent Events
Equity
The Equity Market
Fraud and Accounting Shenanigans
Bonds
Economic Insight: "The P/E Ratio"
Global Business Insight: "Stock Market Booms and Busts"
Global Business Insight: "Country Bond Ratings"
Economically Speaking: "Accountants Figure Law to Benefit Them"
32. The Land Market and Natural Resources
Land
Nonrenewable Resources
Renewable Resources
Economically Speaking: "Debate: Is Anti-Sprawl Really 'Smart' Growth?"
33. Aging, Social Security, and Health Care
Aging and Social Security
Health Economics
Global Business Insight: "The World Is Aging"
Economic Insight: "Myths About Social Security"
Global Business Insight: "Health-Care Spending in Various Nations"
Economically Speaking: "Many Travel a Painful Circuit for Their Managed Health Care"
34. Income Distribution, Poverty, and Government Policy
Income Distribution and Poverty
The Poor
Government Antipoverty Policies
Income Distribution Among Nations
Global Business Insight: "Economic Development and Happiness"
Economically Speaking: "Zimbabwe: Income Distribution and Policy"
VIII. Issues in International Trade and Finance
35. World Trade Equilibrium
An Overview of World Trade
An Example of International Trade Equilibrium
Sources of Comparative Advantage
Global Business Insight: "The Dutch Disease"
Economically Speaking: "China Trade Will Come Back to Haunt Us"
36. International Trade Restrictions
Arguments for Protection
Tools of Commercial Policy
Preferential Trade Agreements
Global Business Insight: "Smoot-Hawley Tariff"
Economically Speaking: "Bull in a China Shop"
37. Exchange Rates and Financial Links Between Countries
Past and Current Exchange-Rate Arrangements
Fixed or Floating Exchange Rates
Prices and Exchange Rates
Interest Rates and Exchange Rates
Global Business Insight: "The IMF and the World Bank"
Economically Speaking: "The European Union"
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