Economics

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For two-semester courses in Principles of Economics.   The Relevance of Economics Through Real-world Business Examples One of the challenges of teaching Principles of Economics is fostering interest in concepts that may not seem applicable to students’ lives. Economics with MyEconLab makes economics relevant by demonstrating how real businesses use economics to make decisions every day. And with an ever changing U.S. and world economy, the Sixth Edition has been updated with the latest developments using new real-world business and policy examples. Regardless of their future career path–opening an art studio, trading on Wall Street, or bartending at the local pub–students will benefit from understanding the economic forces behind their work.   Also Available with MyEconLab® This title is available with MyEconLab–an online homework, tutorial, and assessment program designed to work with this text to engage students and improve results. Within its structured environment, students practice what they learn, test their understanding, and pursue a personalized study plan that helps them better absorb course material and understand difficult concepts.   NOTE: You are purchasing a standalone product; MyEconLab does not come packaged with this content. If you would like to purchase both the physical text and MyEconLab search for:   0134417291 / 9780134417295Economics Plus MyEconLab with Pearson eText (2-semester Access) -- Access Card Package   Package consists of: 0134105842 / 9780134105840 Economics0134124375 / 9780134124377 MyEconLab with Pearson eText -- Access Card -- for Economics   Cover Title Page Copyright Page About the Authors Brief Contents Contents Flexibility Chart Preface A Word of Thanks Chapter 1: Economics: Foundations and Models Will Smart Devices Revolutionize Health Care? 1.1. Three Key Economic Ideas 1.2. The Economic Problem That Every Society Must Solve 1.3. Economic Models 1.4. Microeconomics and Macroeconomics 1.5. A Preview of Important Economic Terms Conclusion Chapter Summary and Problems Appendix: Using Graphs and Formulas Graphs of One Variable Graphs of Two Variables Formulas Chapter 2: Trade-offs, Comparative Advantage, and the Market System Managers at Tesla Motors Face Trade-offs 2.1. Production Possibilities Frontiers and Opportunity Costs 2.2. Comparative Advantage and Trade 2.3. The Market System Conclusion Chapter 3: Where Prices Come From: The Interaction of Demand and Supply How Smart Is Your Watch? 3.1. The Demand Side of the Market 3.2. The Supply Side of the Market 3.3. Market Equilibrium: Putting Demand and Supply Together 3.4. The Effect of Demand and Supply Shifts on Equilibrium Conclusion Chapter 4: Economic Efficiency, Government Price Setting, and Taxes The Sharing Economy, Phone Apps, and Rent Control 4.1. Consumer Surplus and Producer Surplus 4.2. The Efficiency of Competitive Markets 4.3. Government Intervention in the Market: Price Floors and Price Ceilings 4.4. The Economic Effect of Taxes Conclusion Appendix: Quantitative Demand and Supply Analysis Demand and Supply Equations Calculating Consumer Surplus and Producer Surplus Chapter 5: Externalities, Environmental Policy, and Public Goods Can Economic Policy Help Protect the Environment? 5.1. Externalities and Economic Efficiency 5.2. Private Solutions to Externalities: The Coase Theorem 5.3. Government Policies to Deal with Externalities 5.4. Four Categories of Goods Conclusion Chapter 6: Elasticity: The Responsiveness of Demand and Supply Do People Respond to Changes in the Price of Gasoline? 6.1. The Price Elasticity of Demand and Its Measurement 6.2. The Determinants of the Price Elasticity of Demand 6.3. The Relationship between Price Elasticity of Demand and Total Revenue 6.4. Other Demand Elasticities 6.5. Using Elasticity to Analyze the Disappearing Family Farm 6.6. The Price Elasticity of Supply and Its Measurement Conclusion Chapter 7: The Economics of Health Care How Much Will You Pay for Health Insurance? 7.1. The Improving Health of People in the United States 7.2. Health Care around the World 7.3. Information Problems and Externalities in the Market for Health Care 7.4. The Debate over Health Care Policy in the United States Conclusion Chapter 8: Firms, the Stock Market, and Corporate Governance Is Twitter the Next Facebook? 8.1. Types of Firms 8.2. How Firms Raise Funds 8.3. Using Financial Statements to Evaluate a Corporation 8.4. Corporate Governance Policy and the Financial Crisis of 2007–2009 Conclusion Appendix: Tools to Analyze Firms’ Financial Information Using Present Value to Make Investment Decisions Going Deeper into Financial Statements Chapter 9: Comparative Advantage and the Gains from International Trade President Obama, Nike, and Free Trade 9.1. The United States in the International Economy 9.2. Comparative Advantage in International Trade 9.3. How Countries Gain from International Trade 9.4. Government Policies That Restrict International Trade 9.5. The Arguments over Trade Policies and Globalization Conclusion Chapter 10: Consumer Choice and Behavioral Economics J.C. Penney Customers Didn’t Buy into “Everyday Low Prices” 10.1. Utility and Consumer Decision Making 10.2. Where Demand Curves Come From 10.3. Social Influences on Decision Making 10.4. Behavioral Economics: Do People Make Their Choices Rationally? Conclusion Appendix: Using Indifference Curves and Budget Lines to Understand Consumer Behavior Consumer Preferences The Budget Constraint Choosing the Optimal Consumption of Pizza and Coke The Slope of the Indifference Curve, the Slope of the Budget Line, and the Rule of Equal Marginal Utility per Dollar Spent Chapter 11: Technology, Production, and Costs Will the Cost of MOOCs Revolutionize Higher Education? 11.1. Technology: An Economic Definition 11.2. The Short Run and the Long Run in Economics 11.3. The Marginal Product of Labor and the Average Product of Labor 11.4. The Relationship between Short-Run Production and Short-Run Cost 11.5. Graphing Cost Curves 11.6. Costs in the Long Run Conclusion Appendix: Using Isoquants and Isocost Lines to Understand Production and Cost Isoquants Isocost Lines Choosing the Cost-Minimizing Combination of Capital and Labor The Expansion Path Chapter 12: Firms in Perfectly Competitive Markets Are Cage-Free Eggs the Road to Riches? 12.1. Perfectly Competitive Markets 12.2. How a Firm Maximizes Profit in a Perfectly Competitive Market 12.3. Illustrating Profit or Loss on the Cost Curve Graph 12.4. Deciding Whether to Produce or to Shut Down in the Short Run 12.5. “If Everyone Can Do It, You Can’t Make Money at It”: The Entry and Exit of Firms in the Long Run 12.6. Perfect Competition and Efficiency Conclusion Chapter 13: Monopolistic Competition: The Competitive Model in a More Realistic Setting Is Chipotle the New McDonald’s? 13.1. Demand and Marginal Revenue for a Firm in a Monopolistically Competitive Market 13.2. How a Monopolistically Competitive Firm Maximizes Profit in the Short Run 13.3. What Happens to Profits in the Long Run? 13.4. Comparing Monopolistic Competition and Perfect Competition 13.5. How Marketing Differentiates Products 13.6. What Makes a Firm Successful? Conclusion Chapter 14: Oligopoly: Firms in Less Competitive Markets Apple, Spotify, and the Music Streaming Revolution 14.1. Oligopoly and Barriers to Entry 14.2. Game Theory and Oligopoly 14.3. Sequential Games and Business Strategy 14.4. The Five Competitive Forces Model Conclusion Chapter 15: Monopoly and Antitrust Policy A Monopoly on Lobster Dinners in Maine? 15.1. Is Any Firm Ever Really a Monopoly? 15.2. Where Do Monopolies Come From? 15.3. How Does a Monopoly Choose Price and Output? 15.4. Does Monopoly Reduce Economic Efficiency? 15.5. Government Policy toward Monopoly Conclusion Chapter 16: Pricing Strategy Walt Disney Discovers the Magic of Big Data 16.1. Pricing Strategy, the Law of One Price, and Arbitrage 16.2. Price Discrimination: Charging Different Prices for the Same Product 16.3. Other Pricing Strategies Conclusion Chapter 17: The Markets for Labor and Other Factors of Production Rio Tinto Mines with Robots 17.1. The Demand for Labor 17.2. The Supply of Labor 17.3. Equilibrium in the Labor Market 17.4. Explaining Differences in Wages 17.5. Personnel Economics 17.6. The Markets for Capital and Natural Resources Conclusion Chapter 18: Public Choice, Taxes, and the Distribution of Income Should the Government Use the Tax System to Reduce Inequality? 18.1. Public Choice 18.2. The Tax System 18.3. Tax Incidence Revisited: The Effect of Price Elasticity 18.4. Income Distribution and Poverty Conclusion Chapter 19: GDP: Measuring Total Production and Income Ford Motor Company Rides the Business Cycle 19.1. Gross Domestic Product Measures Total Production 19.2. Does GDP Measure What We Want It to Measure? 19.3. Real GDP versus Nominal GDP 19.4. Other Measures of Total Production and Total Income Conclusion Chapter 20: Unemployment and Inflation Why Is JPMorgan Chase Laying Off Workers? 20.1. Measuring the Unemployment Rate, the Labor Force Participation Rate, and the Employment–Population Ratio 20.2. Types of Unemployment 20.3. Explaining Unemployment 20.4. Measuring Inflation 20.5. Using Price Indexes to Adjust for the Effects of Inflation 20.6. Nominal Interest Rates versus Real Interest Rates 20.7. Does Inflation Impose Costs on the Economy? Conclusion Chapter 21: Economic Growth, the Financial System, and Business Cycles Economic Growth and the Business Cycle at Corning, Inc. 21.1. Long-Run Economic Growth 21.2. Saving, Investment, and the Financial System 21.3. The Business Cycle Conclusion Chapter 22: Long-Run Economic Growth: Sources and Policies Will Economic Reforms in Mexico Boost Growth? 22.1. Economic Growth over Time and around the World 22.2. What Determines How Fast Economies Grow? 22.3. Economic Growth in the United States 22.4. Why Isn’t the Whole World Rich? 22.5. Growth Policies Conclusion Chapter 23: Aggregate Expenditure and Output in the Short Run Fluctuating Demand Helps—and Hurts—Intel and Other Firms 23.1. The Aggregate Expenditure Model 23.2. Determining the Level of Aggregate Expenditure in the Economy 23.3. Graphing Macroeconomic Equilibrium 23.4. The Multiplier Effect 23.5. The Aggregate Demand Curve Conclusion Appendix: The Algebra of Macroeconomic Equilibrium Chapter 24: Aggregate Demand and Aggregate Supply Analysis The Fortunes of Delta Airlines Follow the Business Cycle 24.1. Aggregate Demand 24.2. Aggregate Supply 24.3. Macroeconomic Equilibrium in the Long Run and the Short Run 24.4. A Dynamic Aggregate Demand and Aggregate Supply Model Conclusion Appendix: Macroeconomic Schools of Thought The Monetarist Model The New Classical Model The Real Business Cycle Model The Austrian Model Chapter 25: Money, Banks, and the Federal Reserve System Can Greece Function without Banks? 25.1. What Is Money, and Why Do We Need It? 25.2. How Is Money Measured in the United States Today? 25.3. How Do Banks Create Money? 25.4. The Federal Reserve System 25.5. The Quantity Theory of Money Conclusion Chapter 26: Monetary Policy Why Would a Bank Pay a Negative Interest Rate? 26.1. What Is Monetary Policy? 26.2. The Money Market and the Fed’s Choice of Monetary Policy Targets 26.3. Monetary Policy and Economic Activity 26.4. Monetary Policy in the Dynamic Aggregate Demand and Aggregate Supply Model 26.5. A Closer Look at the Fed’s Setting of Monetary Policy Targets 26.6. Fed Policies during the 2007–2009 Recession Conclusion Chapter 27: Fiscal Policy Does Government Spending Create Jobs? 27.1. What Is Fiscal Policy? 27.2. The Effects of Fiscal Policy on Real GDP and the Price Level 27.3. Fiscal Policy in the Dynamic Aggregate Demand and Aggregate Supply Model 27.4. The Government Purchases and Tax Multipliers 27.5. The Limits to Using Fiscal Policy to Stabilize the Economy 27.6. Deficits, Surpluses, and Federal Government Debt 27.7. The Effects of Fiscal Policy in the Long Run Conclusion Appendix: A Closer Look at the Multiplier An Expression for Equilibrium Real GDP A Formula for the Government Purchases Multiplier A Formula for the Tax Multiplier The “Balanced Budget” Multiplier The Effects of Changes in Tax Rates on the Multiplier The Multiplier in an Open Economy Chapter 28: Inflation, Unemployment, and Federal Reserve Policy Why Does Goodyear Worry about Monetary Policy? 28.1. The Discovery of the Short-Run Trade-Off Between Unemployment and Inflation 28.2. The Short-Run and Long-Run Phillips Curves 28.3. Expectations of the Inflation Rate and Monetary Policy 28.4. Federal Reserve Policy from the 1970s to the Present Conclusion Chapter 29: Macroeconomics in an Open Economy IBM Sings the Dollar Blues 29.1. The Balance of Payments: Linking the United States to the International Economy 29.2. The Foreign Exchange Market and Exchange Rates 29.3. The International Sector and National Saving and Investment 29.4. The Effect of a Government Budget Deficit on Investment 29.5. Monetary Policy and Fiscal Policy in an Open Economy Conclusion Chapter 30: The International Financial System Bayer Uses a Weak Euro to Increase Sales 30.1. Exchange Rate Systems 30.2. The Current Exchange Rate System 30.3. International Capital Markets Conclusion Appendix: The Gold Standard and the Bretton Woods System The Gold Standard The End of the Gold Standard The Bretton Woods System The Collapse of the Bretton Woods System Glossary Company Index Subject Index Credits Back Cover