Student Center | Instructor Center | Information Center | Home 
 
 
Table of Contents
What's New and Improved
Sample Chapters
Book Features
Text Organization
Supplements
About the Website
PageOut
About the Authors
About the Team
Best-Selling Book?
Solman Video Demo
 
Economics, 15/e
Campbell R. McConnell, University of Nebraska, Emeritus
Stanley L. Brue, Pacific Lutheran University
Information Center
 HOME

 
Table of Contents

PART 1: AN INTRODUCTION TO ECONOMICS AND THE ECONOMY

To the Student
  1. The Nature and Method of Economics
    • The Economic Perspective
    • Scarcity and Choice Rational Behavior Marginalism: Benefits and Costs
    • Why Study Economics?
    • Economics for Citizenship Professional and Personal Applications
    • Economics Methodology
    • Theoretical Economics Policy Economics
    • Macroeconomics and Microeconomics
    • Macroeconomics Microeconomics Positive and Normative Economics
    • Pitfalls to Objective Thinking
    • Biases Loaded Terminology Definitions Fallacy of Composition Causation Fallacies
    • A Look Ahead
    • LAST WORD: Fast Food Lines: An Economic Perspective
    • Appendix to Chapter 1: Graphs and Their Meaning Construction of a Graph Direct and Inverse Relationships Dependent and Independent Variables Other Things Equal Slope of a Line Vertical Intercept Equation of a Linear Relationship Slope of a Nonlinear Curve

  2. The Economizing Problem
    • The Foundation of Economics
    • Unlimited Wants Scarce Resources
    • Economics: Employment and Efficiency
    • Full Employment: Using Available Resources Full Production: Using Resources Efficiently Production Possibilities Table Production Possibilities Curve Law of Increasing Opportunity Cost Allocative Efficiency Revisited
    • Unemployment Growth and the Future
    • Unemployment and Productive Inefficiency A Growing Economy A Qualification: International Trade Examples and Applications
    • Economic Systems
    • The Market System The Command System
    • The Circular Flow Model
    • LAST WORD: Women and Expanded Production Possibilities

  3. Individual Markets: Demand and Supply
    • Markets
    • Demand
    • Law of Demand Demand Curve Market Demand Change in Demand Changes in Quantity Demanded
    • Supply
    • Law of Supply The Supply Curve Determinants of Supply Changes in Supply Changes in Quantity Supplied
    • Supply and Demand: Market Equilibrium
    • Surpluses Shortages Equilibrium Price and Quantity Rationing Function of Prices Changes in Supply, Demand, and Equilibrium A Reminder: "Other Things Equal" Application: Pink Salmon
    • LAST WORD: Ticket Scalping: A Bum Rap

  4. The Market System
    • Characteristics of the Market System
    • Private Property Freedom of Enterprise and Choice Self-Interest Competition Markets and Prices Reliance on Technology and Capital Goods Specialization Use of Money Active, but Limited Government
    • The Market System at Work
    • What Will Be Produced? How Will the Goods and Services Be Produced? Who Will Get the Goods and Services? How Will the System Accommodate Change?
    • Competition and the "Invisible Hand"
    • LAST WORD: Shuffling the Deck: How the Market System Arranges the World’s Individual Resources

  5. The U.S. Economy: Private and Public Sectors
    • Households as Income Receivers
    • The Functional Distribution of Income The Personal Distribution of Income
    • Households as Spenders
    • Personal Taxes Personal Saving Personal Consumption Expenditure
    • The Business Population
    • Legal Forms of Business
    • Advantages and Disadvantages The Principal-Agent Problem
    • The Public Sector: Government’s Role
    • Providing the Legal Structure
    • Maintaining Competition
    • Redistributing Income
    • Reallocating Resources
    • Spillovers or Externalities Public Goods and Services Quasipublic Goods The Reallocation Process
    • Promoting Stability
    • The Circular Flow Revisited
    • Government Finance
    • Government Purchases and Transfers
    • Federal Finance
    • Federal Expenditures Federal Tax Revenues
    • State and Local Finance
    • State Finances Local Finances Fiscal Federalism
    • LAST WORD: The Financing of Corporate Operations

  6. The United States in the Global Economy
    • International Linkages
    • U.S. and World Trade
    • Volume and Pattern Rapid Trade Growth Participants in International Trade
    • Specialization and Comparative Advantage
    • Basic Principle Comparative Costs Terms of Trade Gains from Specialization and Trade
    • The Foreign Exchange Market
    • Government and Trade
    • Trade Impediments and Subsidies Why Government Trade Interventions? Costs to Society
    • Multilateral Trade Agreements and Free-Trade Zones
    • Reciprocal Trade Agreements Act General Agreements on Tariffs and Trade (GATT) World Trade Organization (WTO) The European Union (EU) North American Free Trade Agreement (NAFTA)
    • Increased Global Competition
    • LAST WORD: Buy American: the Global Refrigerator

PART 2: NATIONAL INCOME, EMPLOYMENT, AND FISCAL POLICY
  1. Measuring Domestic Output, National Income, and the Price Level
    • Assessing the Economy’s Performance
    • Gross Domestic Product
    • A Monetary Measure Avoiding Multiple Counting GDP Excludes Nonproduction Transactions Two Ways of Looking at GDP: Spending and Income
    • The Expenditures Approach
    • Personal Consumption Expenditures © Gross Private Domestic Investment (Ig) Government Purchases (G) Net Exports (Xn) Putting It All Together: GDP = C + Ig + G + Xn
    • Income Approach
    • Compensation of Employees Rents Interest Proprietor’s Income Corporate Profits Adding Up National Income
    • Other National Accounts
    • Net Domestic Product (NDP) National Income (NI) Personal Income (PI) Disposable Income (DI) The Circular Flow Revisited
    • Nominal GDP versus Real GDP
    • Adjustment Process in a One-Product Economy An Alternative Method Real-World Consideration and Data
    • The Consumer Price Index (CPI)
    • Shortcomings of GDP
    • Nonmarket Transactions Leisure Improved Product Quality The Underground Economy GDP and the Environment Composition and Distribution of Output Per Capita Output Noneconomic Sources of Well-Being
    • LAST WORD: Feeding the GDP Accounts: Where Does the BEA Get the Data It Compiles?

  2. Introduction to Economic Growth and Instability
    • Economic Growth
    • Growth as a Goal Growth in the United States Relative Growth Rates
    • The Business Cycle
    • Phases of the Business Cycle Causation: A First Glance Cyclical Impact: Durables and Nondurables
    • Unemployment
    • Measurement of Unemployment Types of Unemployment Definition of "Full Employment" Economic Cost of Unemployment Noneconomic Costs International Comparisons
    • Inflation
    • Meaning of Inflation Facts of Inflation Types of Inflation Demand-Pull Inflation Complexities
    • Redistribution Effects of Inflation
    • Who is Hurt by Inflation Who is Unaffected or Helped by Inflation Anticipated Inflation Addenda
    • Effects of Inflation on Output
    • Cost-Push Inflation and Real Output Demand-Pull Inflation and Real Output
    • LAST WORD: The Stock Market and the Economy

  3. Building the Aggregate Expenditures Model
    • Simplifications
    • Tools of the Aggregate Expenditures Model
    • Consumption and Saving
    • Income-Consumption and Income-Saving Relationships The Consumption Schedule The Saving Schedule Average and Marginal Propensities Nonincome Determinants of Consumption and Saving Terminology, Shifts, and Stability
    • Investment
    • Expected Rate of Return The Real Interest Rate Investment Demand Curve Shifts in the Investment Demand Curve Investment Schedule Instability of Investment
    • Equilibrium GDP
    • Tabular Analysis Graphical Analysis
    • Other Features of Equilibrium GDP
    • Saving Equals Planned Investment No Unplanned Changes in Inventories
    • LAST WORD: Say’s Law, The Great Depression, And Keynes

  4. Aggregate Expenditures: The Multiplier, Net Exports, and Government
    • Changes in Equilibrium GDP and the Multiplier
    • The Multiplier Effect
    • International Trade and Equilibrium Output
    • Net Exports and Aggregate Expenditures The Net Export Schedule Net Exports and Equilibrium GDP International Economic Linkages
    • Adding the Public Sector
    • Simplifying Assumptions Government Purchases and Equilibrium GDP Taxation and Equilibrium GDP Balanced-Budget Multiplier
    • Equilibrium versus Full-Employment GDP
    • Recessionary Gap Inflationary Gap
    • Application of the Model
    • The Great Depression in the United States Vietnam War Inflation The End of the Japanese Growth "Miracle"
    • LAST WORD: Squaring the Economic Circle

  5. Aggregate Demand and Aggregate Supply
    • Aggregate Demand
    • Aggregate Demand Curve Derivation of the Aggregate Demand Curve from the Aggregate Expenditures Model Determinants of Aggregate Demand Aggregate Demand Shifts and the Aggregate Expenditures Model
    • Aggregate Supply
    • Aggregate Supply Curve Determinants of Aggregate Supply
    • Equilibrium: Real Output and the Price Level
    • Changes in Equilibrium
    • Increases in AD: Demand-Pull Inflation Multiplier with Price-Level Changes Decreases in AD: Recession and Cyclical Unemployment Decreases in AS: Cost-Push Inflation Increases in AS: Full Employment with Price-Level Stability
    • LAST WORD: Why Is Unemployment So High?

  6. Fiscal Policy
    • Legislative Mandates
    • Fiscal Policy and the AD/AS Model
    • Expansionary Fiscal Policy Contractionary Fiscal Policy Policy Options: G or T?
    • Built in Stability
    • Automatic or Built-In Stabilizers
    • Evaluating Fiscal Policy
    • Full-Employment Budget
    • Problems, Criticisms, and Complications
    • Problems of Timing A Political Business Cycle? Offsetting State and Local Finance Crowding-Out Effect Fiscal Policy, Aggregate Supply, and Inflation Fiscal Policy in the Open Economy Supply-Side Fiscal Policy
    • LAST WORD: The Leading Indicators

PART 3: MONEY, BANKING, AND MONETARY POLICY
  1. Money and Banking
    • The Functions of Money
    • The Supply of Money
    • Money Definition M1 Money Definition M2 Money Definition M3
    • What "Backs" the Money Supply
    • Money as Debt Value of Money Money and Prices Stabilization of Money’s Value
    • The Demand for Money
    • Transaction Demand, Dt Asset Demand, Da Total Money Demand, Dm
    • The Money Market
    • Adjustment to a Decline in the Money Supply Adjustment to an Increase in the Money Supply
    • The Federal Reserve and the Banking System
    • Historical Background Board of Governors Assistance and Advice The Twelve Federal Reserve Banks Commercial Banks and Thrifts Fed Functions and the Money Supply Federal Reserve Independence
    • Recent Developments in Money and Banking
    • The Relative Decline of Banks and Thrifts Consolidation among Banks and Thrifts Convergence of Services Provided by Financial Institutions Globalization of Financial Markets Electronic Transactions
    • LAST WORD: The Global Greenback

  2. How Banks and Thrifts Create Money
    • The Balance Sheet of a Commercial Bank
    • Prologue: The Goldsmiths
    • Single Commercial Bank
    • Formations of a Commercial Bank Money-Creating Transactions of a Commercial Bank ·Profits, Liquidity, and the Federal Funds Market
    • The Banking System: Multiple-Deposit Expansion
    • The Banking System’s Lending Potential The Monetary Multiplier Some Modifications Need for Monetary Control
    • LAST WORD: The Bank Panics of 1930 and 1933

  3. Monetary Policy
    • Consolidated Balance Sheet of the Federal Reserve Banks
    • Assets Liabilities
    • Tools of Monetary Policy
    • Open-Market Operations The Reserve Ratio The Discount Rate Easy Money and Tight Money Relative Importance
    • Monetary Policy, Real GDP, and the Price Level
    • Cause-Effect Chain Effects of an Easy Money Policy Effects of a Tight Money Policy Monetary Policy and Aggregate Supply
    • Effectiveness of Monetary Policy
    • Strengths of Monetary Policy Shortcomings and Problems Targeting the Federal Funds Rate Monetary Policy and the International Community
    • The "Big Picture"
    • LAST WORD: For the Fed, Life Is a Metaphor

PART 4: LONG-RUN PERSPECTIVES AND MACROECONOMIC DEBATES
  1. Extending the Analysis of Aggregate Supply
    • Short-Run and Long-Run Aggregate Supply
    • Short-Run Aggregate Supply Long-Run Aggregate Supply Equilibrium in the Extended AD-AS Model
    • Applying the Extended AD-AS Model
    • Demand-Pull Inflation in the Extended AD-AS Model Cost-Push Inflation in the Extended AD-AS Model Recession and the Extended AD-AS Model
    • The Inflation-Unemployment Relationship
    • The Phillips Curve Aggregate Supply Shocks and the Phillips Curve
    • The Long-Run Vertical Phillips Curve
    • Long-Run Vertical Phillips Curve Disinflation
    • Taxation and Aggregate Supply
    • Taxes and Incentives to Work Incentives to Save and Invest The Laffer Curve Criticisms of the Laffer Curve
    • LAST WORD: Has the Impact of Oil Prices Diminished?

  2. Economic Growth and the New Economy
    • Ingredients of Growth
    • Efficiency Factor
    • Production Possibilities Analysis
    • Labor and Productivity Growth in AD-AS Model
    • U.S. Economic Growth Rates
    • Accounting for Growth
    • Inputs versus Productivity Quantity of Labor Technological Advance Quantity of Capital Education and Training Resource Allocation and Economies of Scale Other Factors
    • Productivity Growth and the New Economy
    • Characteristics of the New Economy Macroeconomic Implications Skepticism about the New Economy
    • Is Growth Desirable and Sustainable?
    • The Antigrowth View In Defense of Economic Growth
    • LAST WORD: Some Pleasant Side Effects of the New Economy

  3. Deficits, Surpluses and the Public Debt
    • Deficits, Surpluses, and Debt: Definitions
    • Budget Philosophies
    • Annually Balanced Budget Cyclically Balanced Budget Functional Finance
    • The Public Debt: Facts and Figures
    • Causes Quantitative Aspects Social Security Considerations
    • False Concerns
    • Bankruptcy Burdening Future Generations
    • Substantive Issues
    • Income Distribution Incentives Foreign-Owned Public Debt Crowding Out and the Stock of Capital
    • Deficits and Surpluses: 1990-2010
    • Options for the Surpluses
    • Pay Down the Public Debt Reduce Taxes Increase Government Expenditures Bolster the Social Security Trust Fund Combination of Policies
    • LAST WORD: Debt Reduction and the U.S. Trade Deficit

  4. Disputes Over Macro Theory and Policy
    • Some History: Classical Economics and Keynes
    • The Classical View The Keynesian View
    • What Causes Macro Instability?
    • Mainstream View Monetarist View Real-Business-Cycle View Coordination Failures
    • Does the Economy "Self-Correct"?
    • New Classical View of Self Correction Mainstream View of Self-Correction
    • Rules or Discretion?
    • In Support of Policy Rules In Defense of Discretionary Stabilization Policy Increased Macro Stability
    • Summary of Alternative Views
    • LAST WORD: The Taylor Rule: Could a Robot Replace Alan Greenspan?

PART 5: MICROECONOMICS OF PRODUCT MARKETS
  1. Supply and Demand: Elasticities and Government Set Prices
    • Price Elasticity of Demand
    • The Price Elasticity Coefficient and Formula Interpretation of Ed Refinement: Midpoint Formula Graphical Analysis The Total-Revenue Test Determinants of Price Elasticity of Demand Applications of Price Elasticity of Demand
    • Price Elasticity of Supply
    • Price Elasticity of Supply: The Market Period
    • Cross-Elasticity and Income of Demand
    • Cross-Elasticity of Demand
    • Government-Set Prices
    • Price Ceilings and Shortages Prices Floors and Surpluses
    • LAST WORD: Luxury on $8 a Day

  2. Consumer Behavior and Utility Maximization
    • A Closer Look at the Law of Demand
    • Income and Substitution Effects Law of Diminishing Marginal Utility
    • Theory of Consumer Behavior
    • Consumer Choice and Budget Constraints Utility-Maximizing Rule Numerical Example Algebraic Restatement
    • Utility Maximization and the Demand Curve
    • Deriving the Demand Schedule and Curve Income and Substitution Effects Revisited
    • Applications and Extensions
    • The Compact Disc Takeover The Diamond-Water Paradox The Value of Time Medical Care Purchases Cash and Noncash Gifts
    • LAST WORD: Criminal Behavior
    • Appendix to Chapter 21: Indifference Curve Analysis The Budget Line: What Is Attainable Indifference Curves; What is Preferred The Indifference Map Equilibrium at Tangency The Measurement of Utility The Derivation of the Demand Curve

  3. The Costs of Production
    • Economic Costs
    • Explicit and Implicit Costs Normal Profit as a Cost Economic Profit (or Pure Profit) Short Run and Long Run
    • Short-Run Production Relationships
    • Law of Diminishing Returns
    • Short-Run Production Costs
    • Fixed, Variable, and Total Cost Per-Unit, or Average, Costs Marginal Cost Shifts of the Cost Curves
    • Long Run Production Costs
    • Firm Size and Costs The Long-Run Cost Curve Economies and Diseconomies of Scale Applications and Illustrations Minimum Efficient Scale and Industry Structure
    • LAST WORD: Irrelevancy of Sunk costs

  4. Pure Competition
    • Four Market Models
    • Pure Competition: Characteristics
    • Relevance of Pure Competition
    • Demand as Seen by a Purely Competitive Seller
    • Perfectly Elastic Demand Average, Total, and Marginal Revenue Graphic Portrayal
    • Profit-Maximization in the Short Run
    • Total Revenue – Total Cost Approach: Profit-Maximization Case Marginal Revenue – Marginal-Cost Approach
    • Marginal Cost and Short-Run Supply
    • Generalized Depiction Diminishing Returns, Production Costs, and Product Supply Changes in Supply Firm and Industry: Equilibrium Price
    • Profit Maximization in the Long Run
    • Assumptions Goal of Our Analysis Long-Run Equilibrium Long-Run Supply for a Constant-Cost Industry Long-Run Supply for an Increasing-Cost Industry Long-Run Supply for a Decreasing-Cost Industry
    • Pure Competition and Efficiency
    • Productive Efficiency: P = Minimum ATC Allocative Efficiency: P = MC
    • LAST WORD: Pure Competition and Consumer Surplus

  5. Pure Monopoly
    • Pure Monopoly
    • Examples of Monopoly
    • Barriers to Entry
    • Economies of Scale Legal Barriers to Entry: Patents and Licenses Ownership or Control of Essential Resources Pricing and Other Strategic Barriers to Entry
    • Monopoly Demand
    • Marginal Revenue is Less Than Price The Monopolist Is a Price Maker The Monopolist Sets Prices in the Elastic Region of Demand
    • Output and Price Determination
    • Cost Data MR = MC Rule No Monopoly Supply Curve Misconceptions Concerning Monopoly Pricing Possibility of Losses by Monopolist
    • Economic Effects of Monopoly
    • Income Transfer Cost Complications Assessment and Policy Options
    • Price Discrimination
    • Conditions Examples of Price Discrimination Consequences of Price Discrimination
    • Regulated Monopoly
    • Socially Optimal Price: P = MC Fair-Return Price: P = ATC Dilemma of Regulation
    • LAST WORD: De Beers’ Diamonds: Are Monopolies Forever?

  6. Monopolistic Competition and Oligopoly
    • Monopolistic Competition
    • Relatively Large Number of Sellers Differentiated Products Easy Entry and Exit Advertising Monopolistically Competitive Industries
    • Price and Output in Monopolistic Competition
    • The Firm’s Demand Curve The Short Run: Profit or Loss The Long Run: Only a Normal Profit Monopolistic Competition and Efficiency Neither Productive nor Allocative Efficiency Excess Capacity
    • Product Variety
    • Benefits of Product Variety Further Complexity
    • Oligopoly
    • A Few Large Producers Homogenous or Differentiated Products Control Over Price, but Mutual Interdependence Entry Barriers Mergers Measures of Industry Concentration
    • Oligopoly Behavior: A Game Theory Overview
    • Mutual Interdependence Revisited Collusive Tendencies Incentive to Cheat
    • Three Oligopoly Models
    • Kinked-Demand Theory: Noncollusive Oligopoly
    • Price Leadership Model
    • Oligopoly and Advertising
    • Positive Effects of Advertising Potential Negative Effects of Advertising
    • Oligopoly and Efficiency
    • Productive and Allocative Efficiency Qualifications
    • LAST WORD: Oligopoly in the Beer Industry

  7. Technology, R & D, and Efficiency
    • Technological Advance: Invention, Innovation, and Diffusion
    • Invention Innovation Diffusion R & D Expenditures Modern View of Technological Advance
    • Role of Entrepreneurs and Other Innovators
    • Forming Start-Ups Innovation within Existing Firms Anticipating the Future Exploiting University and Government Scientific Research
    • A Firm’s Optimal Amount of R & D
    • Interest-Rate Cost of Funds Expected Rate of Return Optimal R & D Expenditures
    • Increased Profit via Innovation
    • Increased Revenue via Product Innovation Reduced Cost via Process Innovation
    • Imitation and R & D Incentives
    • Benefits of Being First
    • Role of Market Structure
    • Market Structure and Technological Advance Inverted-U Theory Market Structure and Technological Advance: The Evidence
    • Technological Advance and Efficiency
    • Productive Efficiency Allocative Efficiency Creative Destruction
    • LAST WORD: On the Path to the Personal Computer and the Internet

PART 6: MICROECONOMICS OF RESOURCE MARKETS
  1. The Demand for Resources
    • Significance of Resource Pricing
    • Marginal Productivity Theory of Resource Demand
    • Resource Demand as a Derived Demand Marginal Revenue Product (MRP) Rule for Employing Resources: MRP = MRC MRP as Resource Demand Schedule Resource Demand Under Imperfect Product Market Competition Market Demand for a Resource
    • Changes in Product Demand
    • Changes in Productivity Changes in the Prices of Other Resources Occupational Employment Trends
    • Elasticity of Resource Demand
    • Optimal Combination of resources
    • The Least Cost Rule The Profit-Maximizing Rule Numerical Illustration
    • LAST WORD: Input Substitution: The Case of ATMs

  2. Wage Determination
    • Labor, Wages, and Earnings
    • General Level of Wages
    • Role of Productivity Real Wages and Productivity Secular Growth of Real Wages
    • A Purely Competitive Labor Market
    • Market Demand for Labor Market Supply for Labor Labor Market Equilibrium
    • Monopsony Model
    • Upward-Sloping Labor Supply to Firm MRC Higher than the Wage Rate Equilibrium Wage and Employment Examples of Monopsony Power
    • Three Union Models
    • Demand-Enhancement Model Exclusive or Craft Union Model Inclusive or Industrial Union Model Wage Increases and Unemployment
    • Bilateral Monopoly Model
    • Indeterminate Outcome of Bilateral Monopoly Desirability of Bilateral Monopoly
    • The Minimum Wage Controversy
    • Case against the Minimum Wage Case for the Minimum Wage Evidence and Conclusions
    • Wage Differentials
    • Marginal Revenue Productivity Noncompeting Groups Compensating Differences Market Imperfections
    • Pay for Performance
    • The Principal-Agent Problem Revisited Addenda: Negative Side Effects of Pay for Performance
    • LAST WORD: On African-Style Hairbraiders and Stodgy Economists

  3. Rent, Interest, and Profit
    • Economic Rent
    • Perfectly Inelastic Supply Changes in Demand Land Rent: A Surplus Payment Application: A Single Tax on Land Productivity Differences and Rent Differences Alternative Uses of Land
    • Interest
    • Loanable Funds Theory of Interest
    • Extending the Model
    • Range of Interest Rates Pure Rate of Interest Role of the Interest Rate Application: Usury Laws
    • Economics Profit
    • Role of the Entrepreneur Sources of Economic Profit Risk and Profit Innovation and Profit Functions of Profit
    • Income Shares
    • LAST WORD: Determining the Price of Credit

PART 7: MICROECONOMICS OF GOVERNMENT
  1. Government and Market Failure
    • Public Goods
    • Demand for Public Goods Supply of Public Goods Optimal Quantity of a Public Good Cost-Benefit Analysis
    • Externalities Revisited
    • Spillover Costs Spillover Benefits Individual Bargaining: Coase Theorem Liability Rules and Lawsuits Government Intervention A Market-Based Approach to Spillover Costs Society’s Optimal Amount of Externality Reduction Solid-Waste Disposal and Recycling Global Warming
    • Information Failures
    • Inadequate Information Involving Sellers Inadequate Information Involving Buyers Qualifications
    • LAST WORD: Lojack: A Case of Positive Externalities

  2. Public Choice Theory and the Economics of Taxation
    • Revealing Preferences through Majority Voting
    • Inefficient Voting Outcomes Paradox of Voting Median-Voter Model
    • Government Failure
    • Special Interests and Rent Seeking Clear Benefits, Hidden Costs Limited and Bundled Choice Bureaucracy and Inefficiency Imperfect Institutions
    • Apportioning the Tax Burden
    • Benefits Received versus Ability to Pay Progressive, Proportional, and Regressive Taxes
    • Tax Incidence and Efficiency Loss
    • Elasticity and Tax Incidence Efficiency of a Tax Loss Probable Incidence of U.S. Taxes The U.S. Tax Structure
    • The Issue of Freedom
    • The Conservative Position The Liberal Position
    • LAST WORD: "Government Failure" in the News

PART 8: MICROECONOMICS ISSUES AND POLICIES
  1. Antitrust Policy and Regulation
    • The Antitrust Laws
    • Historical Background Sherman Act of 1890 Clayton Act of 1914 Federal Trade Commission Act of 1914 Celler-Kefauver Act of 1950
    • Antitrust Policy: Issues and Impacts
    • Issues of Interpretation Issues of Enforcement: Tradeoffs among Goals Effectiveness of Antitrust Laws
    • Industrial Regulation
    • Natural Monopoly Problems with Industrial Regulation Legal Cartel Theory
    • Deregulation
    • Controversy Outcomes of Deregulation
    • Social Regulation
    • Distinguishing Features The Optimal Level of Social Regulation In Support of Social Regulation Criticisms of Social Regulations Two Reminders
    • LAST WORD: The Microsoft Antitrust Case

  2. Agriculture: Economics and Policy
    • Economics of Agriculture
    • Short-Run Problem: Price and Income Instability
    • Economics of Farm Policy
    • Rationale for Farm Subsidies Background: The Parity Concept Economics of Price Supports Reduction of Surpluses
    • Criticism, Politics, and Reform
    • Criticisms The Politics of Farm Policy Recent Reform: Freedom to Farm
    • LAST WORD: The Sugar Program: A Sweet Deal

  3. Income Inequality and Poverty
    • Facts about Income Inequality
    • Distribution of Personal Income by Income Category Distribution of Personal Income by Quintiles (Fifths) The Lorenz Curve
    • Income Mobility: The Time Dimension
    • Effect of Government Redistribution
    • Causes of Income Inequality
    • Ability Education and Training Discrimination Preferences and Risks Unequal Distribution of Wealth Market Power Luck, Connections, and Misfortune
    • Trends in Income Inequality
    • Causes of Growing Inequality
    • Equality versus Efficiency
    • The Case for Equality: Maximizing Total Utility The Case for Inequality: Incentives and Efficiency The Equality-Efficiency Tradeoff
    • The Economics of Poverty
    • Definition of Poverty Incidence of Poverty Poverty Trends The "Invisible" Poor
    • The Income-Maintenance System
    • Social Insurance Programs Public Assistance Programs
    • Welfare: Goals and Conflicts
    • Common Features Conflicts among Goals
    • Welfare Reform
    • Temporary Assistance to Needy Families (TANF) Assessment of TANF
    • LAST WORD: Some Facts on U.S. Wealth and Its Distribution

  4. Labor Market Issues: Unionism, Discrimination, AND Immigration
    • Unionism in America
    • Business Unionism Union Membership The Decline of Unionism
    • Collective Bargaining
    • The Bargaining Process
    • Economic Effects of Unions
    • The Union Wage Advantage Efficiency and Productivity
    • Labor Market Discrimination
    • Types of Discrimination Costs of Discrimination
    • Economic Analysis of Discrimination
    • Taste-for-Discrimination Model Statistical Discrimination Occupational Segregation: The Crowding Model
    • Antidiscrimination Policies and Issues
    • The Affirmative Action Controversy Recent Developments
    • Immigration
    • Number of Immigrants Economics of Immigration Complications and Modifications Immigration: Two Views
    • LAST WORD: Orchestrating Impartiality

  5. The Economics of Health Care
    • The Health Care Industry
    • Twin Problems: Costs and Access
    • High and Rising Health Care costs
    • Health Care Spending Quality of Health Care: Are We Healthier? Economic Implications of Rising Costs The Basic Problem
    • Limited Access
    • Why the Rapid Rise in Costs?
    • Peculiarities of the Health Care Market The Increasing Demand for Health Care Role of Health Insurance Supply Factors in Rising Health Care Prices Relative Importance
    • Reform of the Health Care System
    • Cost Containment: Altering Incentives Deductibles and Incentives Medicare and DRG Recent Laws and Proposals
    • LAST WORD: A Market for Human Organs?

PART 9: INTERNATIONAL ECONOMICS AND THE WORLD ECONOMY
  1. International Trade
    • Some Key Facts
    • The Economic Basis for Trade
    • Comparative Advantage: Graphical Analysis
    • Two Isolated Nations Specializing Based on Comparative Advantage Terms of Trade Gains from Trade Trade with Increasing Costs The Case for Free Trade
    • Supply and Demand Analysis of Exports and Imports
    • Supply and Demand in the United States Supply and Demand in Canada Equilibrium World Price, Exports, and Imports
    • Trade Barriers
    • Economic Impact of Tariffs Economic Impact of Quotas Net Costs of Tariffs and Quotas
    • The Case for Protection: A Critical Review
    • Military Self-Sufficiency Argument Diversification for Stability Argument Infant-Industry Argument Protection against Dumping Argument Cheap Foreign Labor Argument A Summing up
    • The World Trade Organization
    • LAST WORD: Petition of the Candlemakers, 1845

  2. Exchange Rates, The Balance of Payments, and Trade Deficits
    • Financing International Trade
    • U.S. Export Transaction U.S. Import Transaction
    • The Balance of Payments
    • Current Account Capital Account Official Reserves Account Payments Deficits and Surpluses
    • Flexible Exchange Rates
    • Depreciation and Appreciation Determinants of Exchange Rates Flexible Rates and The Balance Of Payments Disadvantages Of Flexible Exchange Rates
    • Fixed Exchange Rates
    • Use Of Reserves Trade Policies Exchange Controls and Rationing Domestic Macroeconomic Adjustments
    • International Exchange Rate Systems
    • The Gold Standard: Fixed Exchange Rates The Bretton Woods System The Current System: The Managed Float
    • Recent U.S. Trade Deficits
    • Causes of the Trade Deficit Implications of U.S. Trade Deficits
    • LAST WORD: Speculation in Currency Markets

  3. The Economics of Developing Countries
    • The Rich and The Poor
    • Classifications Comparisons Growth, Decline, and Income Gaps The Human Realities
    • Obstacles to Economic Development
    • Natural Resources Human Resources Capital Accumulation Technological Advance Sociocultural and Institutional Factors
    • The Vicious Circle
    • Role of Government
    • A Positive Role Public Sector Problems
    • Role of Advanced Nations
    • Expanding Trade Foreign Aid: Public Loans and Grants Flows of Private Capital
    • Where from Here?
    • VC Policies for Promoting Growth IAC Policies for Fostering DVC Growth
    • LAST WORD: Famine in Africa

  • Bonus Web Chapter Transition Economies: Russia and China
    • Ideology and Institutions
    • State Ownership and Central Planning
    • Planning Goals and Techniques
    • Problems with Central Planning
    • The Coordination Problem The Incentive Problem
    • The Collapse of the Soviet Economy
    • Declining Growth Poor Product Quality Lack of Consumer Goods Large Military Burden Agricultural Drag
    • The Russian Transition to a Market System
    • Privatization Price Reform Promotion of Competition Making the Ruble Fully Convertible Price Level Stabilization Other Major Problems Future Prospects
    • Market Reforms In China
    • Agricultural and Rural Reform Reform of Urban Industries Special Economic Zones Development of Supporting Institutions Transformation of the SOEs
    • Outcomes and Prospects
    • Positive Outcomes of Reform Problems
    • LAST WORD: "Police Smash Smirnov’s Doors"




Copyright ©2001 The McGraw-Hill Companies.
Any use is subject to the Terms of Use and Privacy Policy.
McGraw-Hill Higher Education is one of the many fine businesses of the The McGraw-Hill Companies.