Principles of Economics
Edited by Mike Sproul
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a. The Invisible
Hand
b. Central Planning Versus Free Market Capitalism
c. Specialization and Comparative Advantage
d. Scarcity and Competition
e. The No Free Lunch Principle
g. Cost-Benefit Analysis
h. Why Study Economics?
i. Questions
2. Supply and Demand—the Basics
* c. Equilibrium of Supply and Demand
* e. The Algebra of Supply and Demand
3. Elasticity
* a. Elasticity of Demand
* b. Elasticity of Supply
Example: the Coffee Market
* e. Income Elasticity and the Engel Curve
4. Cost-Benefit Analysis of Taxes and Subsidies
* a. Consumer Surplus
* b. Producer Surplus
* c. Imports and Protectionism
* d. Taxes
i. Tax Burdens
Example: Taxation with Fixed Supply
Example: Tariffs in Big Countries and Little Countries
ii. The Algebra of Taxation
* e. Dollar outflows, Trade Deficits, and Bank Runs
* f. Subsidies: Who Gains? Who Loses?
5. Cost-Benefit Analysis of Price Controls
* a. Total Cost and Total Benefit
* b. The Effects of Price Ceilings
Example: Rent Control
* c. The Effects of Price Floors
Example: The Minimum Wage
Example: Farm Price Supports
Example: Price Supports with Reselling
* a. Indifference Curves {advanced version}
* b. The Budget Constraint {advanced version}
* c. The Consumer’s Optimum {advanced version}
* d. The Calculus of Optimization
e. Rationing and the Consumer’s Optimum
* g. A Subsidy versus a Cash Gift
* h. A Subsidy versus a Voucher
* i. The Compensating Variation and the Equivalent Variation
7. Variations of the Consumer’s Optimum
*b. The Engel Curve
*d. The Demand Curve
*e. The Compensated Demand Curve
The income Effect and the Substitution Effect
*f. The Compensating Variation and the Equivalent Variation Applied to Demand Curves
8. Profit-Maximization by a Competitive Firm
* a. Cost and Revenue: Total, Average, and Marginal
* b. The Geometry of Profit-Maximization
* c. The Calculus of Profit-Maximization {Alternate Version}
* d. Costs: Fixed, Variable, and Sunk
e. The Firm’s Supply Curve and the Shut-Down Price
f. A Critique of the Shut-Down Price
g. Short-Run Costs and Long-Run Costs
9. Behind Cost: The Production Function
a. The Production Function with One Input * {Advanced version}
b. From Production Functions to Cost Functions * {Advanced version}
c. The Production Function with Two Inputs * {Advanced version}
* e. The Productive Optimum: Geometry
f. The Calculus of the Productive Optimum
g. From Production Functions to Cost Functions—Two Inputs
*a. From Firm Supply to Market Supply
*b. Externalities and the Industry Supply Curve
*d. A Zero-Profit Paradox: Firm Profits and Industry Profits
e. Competition and Pareto-Efficiency
*f. Efficiency in Production, Consumption, and Trade
11. Monopoly
* a. Profit-Maximization by a monopolist: A Numerical Example
* b. The Geometry of Monopolistic Profit-Maximization
* c. The Mathematics of Monopolistic Profit-Maximization
* d. The Deadweight Loss of Monopoly
* e. Cost-Reducing Monopoly: Is Monopoly Good For You?
* f. Regulation and Natural Monopoly
* g. Regulation of Ordinary Monopolies
* h. Monopoly and Price Ceilings
* i. Transfer Pricing
* a. Price Discrimination and Consumer Surplus {Alternate version 12.a}
* b. Price Discrimination and Economic Efficiency
* c. Market Segmentation
* d. Imperfect Price Discrimination
* e. The All-Or-Nothing Demand Curve
* a. Cartels: Deadweight Loss and the Incentive to Cheat
* c. Example: The Effects of Prosecuting Cartels
* d. Oligopoly: The Cournot Case
* e. Game Theory and The Prisoner’s Dilemma
* f. The Dominant Firm with a Competitive Fringe
14. Monopolistic Competition and Advertising
* a. Profit-Maximization Under Monopolistic Competition
b. Monopolistic Competition vs. Pure Competition
c. Excess Capacity and the Efficiency of Monopolistic Competition
* d. Advertising: The Pros and Cons
* e. Advertising and the Price of Eyeglasses
* f. Advertising, Brand Names, and Product Quality
15. Input Demand
a. The Profit-Maximizing Use of an Input {Advanced Version}
* i. Definitions: MRP, MFC, VMP, AFC
* ii. Profit-Maximization Conditions {Alternate Version 15.a.ii}
b. The Geometry of Input Demand
* i. Why the MRP Curve is the Firm’s Input Demand Curve
* ii. Input Demand Curves Always Slope Down
* iii. Input Demand is Flatter than MRP
* c. Profit-Maximization by a Monopsonist
* d. Monopsony and the Minumum Wage
* a. The Worker’s Optimum
* c. Overtime Wages
i. Supply and Demand Analysis
ii. Indifference Curve Analysis
* d. Labor Unions
iii. The Pros and Cons of Anti-Poverty Programs
* g. The Economics of Discrimination
17. Welfare Economics and Exchange
* b. The Edgeworth Box {Advanced Version}
c. Envy
* d. The Community Production-Possibilities Curve
e. The Geometry of General Equilibrium
18. Externalities and Public Goods
* a. Externalities and Efficiency
* b. The Coase Theorem
* e. Public Goods and Efficiency
19. Interest, Present Value, and Investment Decisions
* a. Future Value and Present Value {Alternate version of 19.a.}
* c. Bond Pricing {Alternate version of 19.c.} {Alternate version 2}
* d. The Present Value Rule for Investments {Alternate version} {Alternate version 2}
* f. The Economics of Exhaustible Resources
* a. Bond Markets
* c. Reading Stock Market Tables
* d. Going Long and Selling Short
* g. Options
h. Eurodollars
21. Consumption and Production Over Time
a. Borrowing-Lending Equilibrium
b. Saving-Investment Equilibrium
* c. Investor Choice
* d. The Capital Asset Pricing Model
* i. Portfolio Choice
* ii. Stock Prices and Beta
22. Measuring Prices and Incomes
* b. The GDP deflator
e. Wages, Prices, and Indexation for Inflation
* f. Real vs. Nominal Interest Rates
a. Economic Growth Around the World
b. Productivity, Capital, and Resources
24. Unemployment, Recession, and the Emergence of Keynesian Economics
a. The Great Depression and Laissez Faire Economics
b. The Philllips Curve
*c. Unemployment
*i. Measurement
*ii. Minimum Wages
iv. Job Search and the Natural Rate of Unemployment
25. Money, Banking, and the Federal Reserve
*a. Types of Money
i. Structure
ii. Duties
*d. Deposit Money and the Multiplier
*e. The Fed's Control of the Money Supply
i. Open Market Operations and the Federal Funds Rate
ii. The Discount Window and the Discount Rate
26. Inflation and the Quantity Theory of Money
c. Money Supply, Money Demand, and the Value of Money
d. Money and Prices: The Evidence
e. Inflation: Some False Causes
f. A Critique of the Quantity Equation
g. A Critique of Money Supply and Money Demand
27. Aggregate Demand and Aggregate Supply
a. The Shape of the Aggregate Demand Curve
c. The Shape of the Aggregate Supply Curve
d. Shifts of Aggregate Demand and Supply
e. A Critique of Aggregate Demand and Aggregate Supply
28. Monetary Policy, Fiscal Policy, and Aggregate Demand
a. Monetary Policy and Aggregate Demand
b. Fiscal Policy and Aggregate Demand
29. Paper Money {Download entire chapter in MS Word}
*ii. Paper Money in Massachusetts
*iii. Private Bank Notes
a. Exports, Imports, and the Circular Flow Model
b. Trade Deficits, Trade Surpluses, and Net Foreign Investment