Economics - 14th Edition - ISBN: 9780750605267, 9781483105796


14th Edition

Made Simple

Authors: Geoffrey Whitehead
eBook ISBN: 9781483105796
Imprint: Made Simple
Published Date: 27th April 1992
Page Count: 446
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Economics: Made Simple, 14th Edition covers all the basic aspects of the economic organization of free-enterprise societies, with special reference to Great Britain's position in the European Community. The book tackles the production, distribution, and exchange of goods and services, both within a country and internationally. The text also discusses the basic ideas on production; the factors, scale, and location of production; and the types of business units. The theory of price determination, the money system, the importance of the distribution theory, and the theory of international trade are also discussed. The book describes macroeconomics and the problems associated with it; national income; the development of economic theory; and money, monetary policy, and monetarism. The part played by governments in controlling abuses, promoting social progress, and managing prosperity and the historical development of Economics are considered as well. Students reading books on Economics as a liberal study and practicing economists will find the book useful.

Table of Contents


Section 1: Introduction

1 Some Basic Ideas

1.1 What is Economics?

1.2 'Wants' and 'Utilities'

1.3 The Production of Utilities

1.4 The Factors of Production

1.5 The Organization of Production

1.6 Consumption and Production

1.7 Scarcity and Choice

1.8 Cost and Opportunity Cost

1.9 'Free' Economies, 'Controlled' Economies and 'Mixed' Economies

1.10 Summary of Chapter 1

Exercises Set 1

Section 2: Production

2 Basic Ideas on Production

2.1 What Does an Economist Understand by 'Production'?

2.2 The Three Classes of Production

2.3 Direct Production and Indirect Production

2.4 Specialization and the Division of Labor

2.5 The Disadvantages of Specialization

2.6 Limitations to the Division of Labor

2.7 Production and Welfare

2.8 The Pattern of Production in an Advanced Economy

2.9 Summary of Chapter 2

Exercises Set 2

3 The Factors of Production

3.1 Introduction

3.2 The Factors of Production—Land

3.3 The Factors of Production—Labor

3.4 The Factors of Production—Capital

3.5 Is the Entrepreneur a Factor of Production?

3.6 Combining the Factors of Production

3.7 The Environmental Closed Cycle of Production

3.8 Summary of Chapter 3

Exercises Set 3

4 The Types of Business Unit

4.1 Introduction

4.2 Types of Business Unit

4.3 Sole-trader Enterprises

4.4 Partnerships

4.5 Limited Partnerships

4.6 The Private Limited Company and the Public Limited Company

4.7 Non-profitmaking Units

4.8 The Public-enterprise Sector of the Economy

4.9 Summary of Chapter 4

Exercises Set 4

5 The Scale of Production

5.1 The Plant, the Firm and the Industry

5.2 Size of Production Units

5.3 Economies of Scale

5.4 Diseconomies of Scale

5.5 The Optimum Firm

5.6 Small-scale Business Units

5.7 The Advantages and Disdavantages of Small-scale Production

5.8 Combination of BusinesVs Units

5.9 Returns to Scale

5.1 Summary of Chapter 5

Exercises Set 5

6 The Location of Production

6.1 The Theory of Location

6.2 Causes of Location

6.3 Industrial Inertia

6.4 The Drift to the South-east in Great Britain

6.5 Localization of Production

6.6 Summary of Chapter 6

Exercises Set 6

Section 3: The Theory of Price Determination

7 Basic Ideas of Demand

7.1 Definition of Demand

7.2 The Conditions of Demand

7.3 A Personal Demand Schedule

7.4 A Composite Demand Schedule

7.5 The General Demand Curve

7.6 Extensions and Contractions of Demand

7.7 Regressive Demand Curves

7.8 Choosing a 'Basket of Goods'—Marginal Utility as the Basis of Demand

7.9 Summary of Chapter 7

Exercises Set 7

8 Basic Ideas of Supply

8.1 Definition of Supply

8.2 Factors Affecting Supply

8.3 Individual Supply Schedules

8.4 A Composite Supply Schedule

8.5 A General Supply Curve

8.6 Extensions, Contractions, and Changes in Supply

8.7 Regressive Supply Curves

8.8 Deciding to Supply—Marginal Cost and Marginal Revenue as the Basis of the Firm's Output

8.9 Summary of Chapter 8

Exercises Set 8

9 How Price is Decided in Perfect Markets

9.1 Equilibrium in the Markets

9.2 Demand and Supply Schedules in Equilibrium

9.3 Diagrammatic Presentation of Equilibrium Price

9.4 Changes in Price under the Influence of Changes in Demand and Supply

9.5 The Demand Curve for the Firm and for the Industry

9.6 The Effect of Price on Firms in Competitive Industries

9.7 When Will a Firm with Specific Assets Leave the Industry?

9.8 Summary of the 'Laws' of Demand and Supply

9.9 Summary of Chapter 9

Exercises Set 9

10 Elasticity of Demand and Supply

10.1 Definition of Elasticity

10.2 The Price Elasticity of Demand

10.3 Five Typical Cases of Price Elasticity of Demand

10.4 Total Revenue and the Elasticity of Demand

10.5 What Determines the Elasticity of Demand?

10.6 The Importance of Elasticity of Demand

10.7 Income Elasticity of Demand

10.8 Cross Elasticity of Demand

10.9 The Price Elasticity of Supply

10.10 Price Fluctuations and Price Elasticity of Demand and Supply

10.11 Summary of Chapter 10

Exercises Set 10

11 Competitive Markets—The Institutions Where Price is Decided

11.1 Definition

11.2 Competitive Markets in Great Britain

11.3 Methods of Dealing

11.4 Specialists who Promote Perfection in the Markets

11.5 Speculators and the Commodity Markets

11.6 'Spot' Markets and 'Futures' Markets

11.7 Hedges—Shelter from the Bitter Economic Winds

11.8 The Economic Status of Speculation

11.9 OPEC and Similar Groupings

11.10 Summary of Chapter 11

Exercises Set 11

12 Monopoly, Oligopoly and Monopolistic Competition

12.1 What is Monopoly?

12.2 Monopolists are Subject to the Authority of the Consumer

12.3 The Demand Curve and the Marginal-revenue Curve of a Monopolist

12.4 Where will a Monopolist Cease Production and hence Determine Price?

12.5 The Monopolist and the Elasticity of Demand

12.6 What is Oligopoly?

12.7 Oligopoly and the Kinked Demand Curve

12.8 What is Monopolistic Competition?

12.9 The Characteristics of Monopolistic Competition

12.10 Determination of Prices under Monopolistic Competition

12.11 Conclusions about Monopolistic Competition

12.12 Summary of Chapter 12

Exercises Set 12

13 Further Aspects of Demand and Supply

13.1 Introduction

13.2 Interrelated Demands

13.3 Interrelated Supply

13.4 The Revealed Preference Theory

13.5 The Theory of Choice—Indifference-curve Analysis

13.6 Price Controls

13.7 Market Price and Normal Price

13.8 Supply Curves

13.9 Discriminating Monopoly

13.10 Summary of Chapter 13

Exercises Set 13

Section 4: Exchanging the Fruits of Production

14 Exchange and Money

14.1 Specialization and Exchange

14.2 Exchange by Barter

14.3 The Functions of Money

14.4 Exchanging Surpluses through the Money System

14.5 The Characteristics of Money

14.6 Types of Money

14.7 Convertible Currencies

14.8 The Value of Money

14.9 An Index of Prices

14.10 Summary of Chapter 14

Exercises Set 14

15 The Distribution of Wealth—Rewards to Factors

15.1 The Importance of Distribution Theory

15.2 David Ricardo

15.3 John Stuart Mill

15.4 Rewards to Factors

15.5 The Market for Factors

15.6 The Demand for Factors—a Derived Demand

15.7 The Marginal Productivity Theory of Factor Prices—the Demand Side

15.8 The Marginal Productivity Theory of Factor Prices—the Supply Side

15.9 Criticisms of the Marginal Productivity Theory

15.10 The Rewards to Factors—Definitions

15.11 Economic Rent—How the Idea Started

15.12 Rents, Quasi-Rent, and Elasticity of Supply

15.13 Are Rents Price-determining or Price-determined?

15.14 Summary of Chapter 15

Exercises Set 15

16 Rewards to Factors—Rent

16.1 Rent—the Reward to Land

16.2 The Demand for Land

16.3 The Supply of Land

16.4 The Price of Land

16.5 Elasticity of Supply of Land—Rent of Situation

16.6 Office Rents in the United Kingdom

16.7 Summary of Chapter 16

Exercises Set 16

17 Rewards to Factors—Wages

17.1 Wages—the Reward to Labor

17.2 Wage-rates and Earnings

17.3 Money Wages and Real Wages

17.4 Early Theories about Wages

17.5 The Marginal Productivity Theory of Wages

17.6 The Bargaining Theory of Wages

17.7 'Economic Rent' and Wages

17.8 Wage Drift

17.9 Equal Pay Legislation

17.10 Summary of Chapter 17

Exercises Set 17

18 Rewards to Factors—Interest

18.1 Interest—the Reward to Capital

18.2 Collecting Capital—the Institutional Investor

18.3 The Supply of Loanable Funds

18.4 The Demand for Loanable Funds

18.5 The Rate of Interest

18.6 The Loanable Funds Theory of Interest

18.7 Summary of Chapter 18

Exercises Set 18

19 Profit—The Reward for Bearing Uncertainty

19.1 Uncertainty

19.2 The Risks of Business

19.3 The Reward for Bearing Uncertainty

19.4 Elements of Profit

19.5 The Functions of Profit in a Free-enterprise System

19.6 Abuse of the Profit System

19.7 Summary of Chapter 19

Exercises Set 19

20 The Financial Institutions

20.1 Introduction

20.2 The Bank of England

20.3 The Money Market

20.4 Commercial Banks

20.5 Merchant Banks

20.6 Discount Houses

20.7 The Foreign-exchange Market

20.8 The Capital Market

20.9 The Stock Exchange

20.10 Summary of Chapter 20

Exercises Set 20

Section 5: The Theory of International Trade

21 International Trade

21.1 Why Trade with Foreign Countries?

21.2 The Principle of Comparative Advantage

21.3 The Idea of Alternative Costs

21.4 The Law of Comparative Costs

21.5 An Example of Specialization in International Trade

21.6 Reasons why Nations never Specialize Completely

21.7 The Terms of Trade

21.8 The Volume of World Trade

21.9 Summary of Chapter 21

Exercises Set 21

22 The Balance of Payments

22.1 Introduction

22.2 Paying for Imports

22.3 UK Balance of Payments

22.4 The Balance of Visible Trade

22.5 The Balance of Invisible Trade

22.6 Capital Items

22.7 A Disequilibrium in the Balance of Payments

22.8 Summary of Chapter 22

Exercises Set 22

23 The Balance of Payments and the Exchange Rate Mechanism

23.1 Introduction

23.2 Curing a Disequilibrium on the Balance of Payments

23.3 Solving the Weakness of a Currency

23.4 Elasticities and the Devaluation of a Currency

23.5 The International Monetary Fund (IMF)

23.6 Summary of Chapter 23

Exercises Set 23

24 The Free-Trade Areas

24.1 Limited Free Trade

24.2 Bilateral and Multilateral Trade

24.3 The General Agreement on Tariffs and Trade (GATT)

24.4 The General Pattern of Free-Trade Areas

24.5 The Sterling Area

24.6 The European Community (EC)

24.7 The European Free Trade Area (EFTA)

24.8 'Trade-Diverting' Effects of Free-trade Areas

24.9 Summary of Chapter 24

Exercises Set 24

Section 6: Macroeconomics

25 What is Macroeconomics?

25.1 Introduction

25.2 The Problems of Macroeconomics

Exercises Set 25 (Revision Questions on Microeconomics)

26 The National Income

26.1 Definition

26.2 Why Measure the National Income?

26.3 Factors Affecting the Size of a Nation's Income

26.4 National Income Statistics

26.5 Using Total Expenditure for Calculating National Income

26.6 Using Factor Incomes for Calculating National Income

26.7 Using the National Output for Calculating National Income

26.8 Difficulties in Calculating National Income

26.9 Uses and Limitations of National Income Statistics

26.10 Summary of Chapter 26

Exercises Set 26

27 The Development of Economic Theory

27.1 Theory and Practice

27.2 Mercantilism

27.3 Classical Economics

27.4 Introduction to Keynesian Economics

27.5 Keynes and the Rate of Interest

27.6 The National Income Equilibrium Diagram

27.7 Flows of Money Round the Economy

27.8 Managing Prosperity—the Nature of the Problem

27.9 Summary of Chapter 27

Exercises Set 27

28 Money, Monetary Policy and Monetarism

28.1 Changing Concepts of the Importance of Money

28.2 The Money Supply

28.3 Monetary Policy 1945-70

28.4 Monetary Policy 1971-90

28.5 Monetarism and Monetarist Policy to Cure Inflation

28.6 Supply-side Economics

28.7 Controlling the Monetary Sector of the Economy

28.8 Conclusions about Monetarist Policies

28.9 Summary of Chapter 28

Exercises Set 28

29 Public Finance

29.1 The Public Sector of the Economy

29.2 Adam Smith's Canons of Taxation

29.3 Tax Structure of the UK

29.4 The Budget as an Instrument of Economic Management

29.5 The National Debt

29.6 The Incidence of Taxation

29.7 Summary of Chapter 29

Exercises Set 29

30 The Future of Economics

30.1 The Greeks had a Word for it

30.2 A Liberal Study

30.3 No Longer a Dismal Science



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© Made Simple 1992
Made Simple
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About the Author

Geoffrey Whitehead

Geoff Whitehead is one of the original Made Simple authors and has sold over 2 million Made Simple books. Before writing full-time he was Head of Professional Studies at Thurrock College, and he now runs a small business consultancy for one of the main publishers of account books. With day-to-day advice at a grass roots level he is still 'keeping it simple' for 350,000 book-keepers using the system each year.

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