Introductory Microeconomics

Introductory Microeconomics

1st Edition - January 1, 1981

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  • Author: Michael Veseth
  • eBook ISBN: 9781483258348

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Introductory Microeconomics explains the basic principles of microeconomics, producer and consumer choices, resource markets, and government policies. The book describes the economics of exchange, such as the role of economic growth, factors that determine the amount and types of exchange, the supply and demand model of market operations, price setting, price changes, and the impact of one market on other markets. The text also explains market failures in terms of free market choice, externalities of failures, monopolies, as well as scarcity and choices leading to poverty. When economic policies are considered by the state, there are trade-offs that are necessary in the exchange. Before the government should make decisions, it always has to consider two opportunity costs, namely, 1) budget constraints, and 2) the opportunity cost of the funds spent in the private sector. For example (no. 1), if more money is spent on transfer payments, less will be left for education, national defense, infrastructure. Another example (no. 2) is when the government collects taxes, a direct loss in real income and utility among consumers will result. The book also presents real world economics in terms of the social security tax in the United States. The book can prove valuable for students of economics or business, sociologists, general readers interested in real-world economics, and policy makers involved in national economic development.

Table of Contents

  • Preface


    Part 1 The Economics of Exchange

    Chapter 1 Scarcity and Choice

    The Problem of Scarcity

    Changing Trade-Offs

    Scarcity and Choice for the Individual

    Scarcity and Choice for the Business Firm

    Scarcity and Choice for Society

    Economic Growth

    Real World Economics: Jim Daniels Has a Hangover?


    Discussion Questions

    Test Yourself

    Chapter 2 Specialization and Exchange

    A Barter Economy

    The Theory of Comparative Advantage

    Mutually Advantageous Exchange

    The Gains from Trade

    Specialization in the Real World

    Comparative Advantage in the Real World

    The Role of Money

    Limits to Exchange

    Distribution of the Gain

    Other Reasons for Exchange

    Real World Economics: Bullish on Wall Street


    Discussion Questions

    Test Yourself

    Chapter 3 Demand and Supply. The Micro Side

    The Role of the Market

    How the Market Works

    The Concept of Demand

    The Demand Curve

    The Concept of Supply

    The Supply Curve

    Changes in Supply

    The Market at Work

    Changing Markets

    Summary of Market Actions

    The Market's Verdict

    Real World Economics: Apartment House Rents


    Discussion Questions

    Test Yourself

    Chapter 4 Markets at Work

    Real World Economics: Falling Calculator Prices

    Real World Economics: Coffee and Tea

    Real World Economics: Cut-Rate Air Fares

    Real World Economics: Cigarette Taxes

    Real World Economics: Rent Controls

    Real World Economics: Price Floors

    Appendix: More About Elasticity


    Discussion Questions

    Test Yourself

    Part 2 Consumer and Producer Choice

    Chapter 5 Consumer Choice

    How Much To Buy?

    Consumer Benefits: Utility

    Maximizing Utility

    Opportunity Cost

    Consumer Equilibrium

    Changing Consumer Choice

    Changing Prices: Demand Curves

    Substitutes, Complements, and Income Effects

    Changing Preferences

    Real World Economics: Gas Lines Grow Longer in Nation's Capital

    Appendix: Indifference Curve Analysis


    Discussion Questions

    Test Yourself

    Chapter 6 Production and Cost

    Who Are the Producers?

    Motives of the Firm

    Production and Costs

    Different Views of Production Costs

    Costs in the Long Run

    Real World Economics: Toys and Games

    Appendix: Production Theory


    Discussion Questions

    Test Yourself

    Chapter 7 Producer Choice: Monopoly

    What Is a Monopoly?

    Monopoly Revenues

    The Monopoly Production Decision

    Monopoly Pricing

    Changing Costs

    Technological Advances

    Monopoly in the Real World

    Real World Economics: A Money-Losing Monopoly


    Discussion Questions

    Test Yourself

    Chapter 8 Producers in competitive Markets

    Perfect Competition

    Price Takers

    Maximizing Profits

    Supply Curves

    Equilibrium for the Industry

    Changing Costs for the Firm

    Supply in the Long Run

    Real World Economics: A Monopoly Versus a Competitive Market


    Discussion Questions

    Test Yourself

    Chapter 9 Imperfect Competition

    Product Differentiation

    Price Discrimination

    Benefits of Price Discrimination



    Government Regulation

    Real World Economics: Automotive Oligopoly


    Discussion Questions

    Test Yourself

    Part 3 Resource Markets

    Chapter 10 Labor Markets

    The Supply of Labor

    The Demand for Labor

    Changes in Labor Demand

    The Labor Demand Curve

    Wage Rate Differentials

    Labor Unions

    Government Labor Policies

    Real World Economics: Cost-of-Living Clauses


    Discussion Questions

    Test Yourself

    Chapter 11 Capital and Natural Resource Markets

    The Demand for Inputs

    Investment: The Demand for Capital

    Input Supplies: Natural Resources

    The Impact of Price Expectations

    The Problem of Property Rights

    Unstable Prices

    Real World Economics: Training and Education Programs


    Discussion Questions

    Test Yourself

    Chapter 12 Energy Markets

    Energy and Economic Development

    Price, Quantity, and Substitution Effects

    Energy Supplies

    Energy Price Controls

    OPEC and the Supply of Oil

    Managing the Energy Problem

    The Paradox of Net Energy

    Energy and the Environment

    Real World Economics: The Price of Energy


    Discussion Questions

    Test Yourself

    Part 4 Market Failures

    Chapter 13 Free Market Choice

    The Free Market Economy

    The Invisible Hand

    Bureaucratic Choice

    Self-Interest and the Invisible Hand

    The Economic Properties of Demand

    Total Benefits and Consumers' Surplus

    The Economic Properties of Supply

    Market Equilibrium: Net Benefits

    Taxes and Net Benefits

    Government Subsidies

    Democratic Choice

    Voting: What Does the Public Want?

    The Role of Government: Market Failures

    Real World Economics: Ticket Scalping


    Discussion Questions

    Test Yourself

    Chapter 14 Market Failures: Externalities

    Private Versus Social Costs and Benefits

    External Benefits

    External Costs

    Optimal Pollution

    Externality Policy Options

    Limits to Government Actions

    Public Goods

    Real World Economics: Free Market or Democratic Choice


    Discussion Questions

    Test Yourself

    Chapter 15 Market Failures: Monopolies

    Monopoly Problems

    Government Monopoly Policy

    Antitrust Regulation

    Trade-Off: Patent Monopolies

    Cost and Benefits of Monopoly Regulation

    Natural Monopolies

    Pricing of Natural Monopolies

    Real World Economics: U.S. Postal Service


    Discussion Questions

    Test Yourself

    Chapter 16 Scarcity and Choice: The Poverty Problem

    Fighting Poverty: The Record

    Who Are the Poor?

    Causes of Poverty

    Transfer Payments

    What Kind of Transfers?

    Minimum Wages

    Job Training and Education

    Public Employment Programs

    Costs of Government Action

    Real World Economics: The Social Security Tax


    Discussion Questions

    Test Yourself

    Suggestions for Further Reading


    Answers to "Test Yourself"


Product details

  • No. of pages: 376
  • Language: English
  • Copyright: © Academic Press 1981
  • Published: January 1, 1981
  • Imprint: Academic Press
  • eBook ISBN: 9781483258348

About the Author

Michael Veseth

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