Intermediate Microeconomics with Applications

Intermediate Microeconomics with Applications describes the methods and practicality of microeconomics, specifically the actual empirical models. This book is divided into 17 chapters and begins with discussions of the principles and concept of utility, preference, indifference and revenue analysis, demand, and production. The succeeding chapters deal with the production theory, the applications of linear programming, theory of costs, and profits. Other chapters explore the fundamentals of perfect and imperfect competition, the issues of pricing, and decision making under uncertainty. The final chapters discuss some factors of production and marketing, the link between the so-called “general equilibrium” and welfare economics, and some economic regulation. This book will be of value to economists and business managers.

Preface

1 Introduction to Microeconomics

A Simple Microeconomic Model

Microeconomics and the Theory of Price

Normative and Positive Microeconomics

Assumptions and Microeconomics

A Brief Review of Supply and Demand

Applications

Suggested Applications

Exercises

Suggested Readings

2 Utility and Preference

Utility and Rationality

Utility Maximization Under Constraints

The Income-Price Budget Constraint and Utility Maximization

Applications

Exercises

Suggested Readings

3 Utility and Indifference Analysis

Multicommodity Utility Function

The Budget Constraint or the Isocost Function

The Consumer "Optimum"

Consumer Equilibrium with Changes in Income and Prices

Utility and Consumer Demand—The Price-Consumption Locus

Applications

Exercises

Suggested Readings

4 The Theory of Demand

Demand Functions

Demand Variables

Elasticity of Demand

Determinants of Price Elasticity

Consumer Expenditures and Price Elasticity

Cross-Price Elasticity of Demand

Income Elasticity of Demand

Some Other Elasticities

Comments

Applications

Exercises

Suggested Readings

5 Revenue Analysis

Total, Marginal, and Incremental Revenue

Revenue and Demand

Revenue with Constant Price

Revenues when Price Varies with Quantity Purchased

Revenues and Multipart Tariffs

Revenues and Discounts

Revenues from Multiple Markets

Revenues from Competing Products

"Net" Revenues: Commissions, Transportation Costs, and Taxes

Revenues and "Joint" Products

Revenues and the Price Elasticity of Demand

Revenues, Markup, and Elasticity

Revenues and Nonprice Competition

Applications

Exercises

Suggested Readings

6 Theory of Production

Production Functions, Output, and Inputs

The Production Environment

Production with One Variable Input

Applications

Exercises

Suggested Readings

7 Further Considerations in Production Theory

Production with Two Variable Inputs

Economies and Diseconomies of Scale

The Firm's Optimal Choice of Inputs

Choice of Inputs with Price Variations

The Firm's Expansion Path

Changes in Technology

Applications

Exercises

Suggested Readings

8 Linear Programming

Solution with Graphs

A Numerical Example Involving Profits

The Algebraic Solution

Integer Programming

Limitations to Linear Programming

Applications

Suggested Applications

Exercises

Suggested Readings

9 Theory of Costs

Costs of Production in the Short Run

Cost Minimization with Multiple Plants

Cost Minimization with Several Variable Inputs

Cost Variation with Rate and Quality of Output

An Empirical Cost Function

Costs in the Long Run

Other Types of Cost Functions

Applications

Exercises

Suggested Readings

10 Profits

Profits and Profit Maximization

Some Other Indicators of Profitability

The Firm's Break-Even Points

Revenue Maximization and the Internal Profit Constraint

Profits and the Managerial Function

Do Firms Maximize Profits?

Applications

Exercises

Suggested Readings

11 Perfect Competition

Determinants of Market Structure

Perfect Competition

The Firm in the Short Run

The Firm in the Long Run

Long-Run Cost (Supply) in the Industry

Pure Competition

Applications

Exercises

Suggested Readings

12 Firms Under Imperfect Competition

Monopolistic Competition

Monopoly

Measurement of Monopoly Power

Oligopoly

Two Models of Oligopoly

Barriers to Entry in Oligopoly

Oligopoly and Concentration Indexes

Applications

Exercises

Suggested Readings

13 Pricing Topics

Price Discrimination

Profit Maximization with Multiple Products

Profit Maximization and Cost Considerations

Oligopoly Behavior Models

Some Special Models

Applications

Exercises

Suggested Readings

14 Decisions Under Uncertainity

Theory of Games

Decision Tree Analysis

Applications

Exercises

Suggested Readings

15 The Market for Resources

The Factors of Production

Market Structure and Input Price

Demand for Variable Inputs with Exogenous Changes

A Model of Derived Demand

Applications

Exercises

Suggested Readings

16 More About Resources

Imperfect Competition in the Resource Market

Supply of Inputs

The Labor Market

The Capital Market

Distribution of Income and Factor Prices

Applications

Exercises

Suggested Readings

17 General Equilibrium and Welfare Economics

Economic Efficiency

Efficiency in Consumption

Welfare Economics

Welfare Criteria

Benefit-Cost Analysis

The Public Sector

Applications

Exercises

Suggested Readings

18 Economic Regulation

Regulation of Price

Regulation of the Rate of Return

The Ramsey Pricing and Inverse Elasticity Rule

The Cost of Regulation

Exercises

Suggested Readings

Chapter 1 Appendix

Chapter 2 Appendix

Chapter 3 Appendix

Chapter 4 Appendix

Chapter 5 Appendix

Chapter 6 Appendix

Chapter 7 Appendix

Chapter 8 Appendix

Chapter 9 Appendix

Chapter 10 Appendix

Chapter 11 Appendix

Chapter 12 Appendix

Chapter 13 Appendix

Chapter 14 Appendix

Chapter 15 Appendix

Chapter 16 Appendix

Chapter 17 Appendix

Glossary

Index