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Essentials of Economics
- 2nd Edition - January 1, 1985
- Authors: James D Gwartney, Richard Stroup, J. R. Clark
- Language: English
- eBook ISBN:9 7 8 - 1 - 4 8 3 2 - 6 2 9 4 - 9
Essentials of Economics, Second Edition is a text intended for a one-term course in economics for college students. It attempts to teach students of the analytic way of studying… Read more
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Request a sales quoteEssentials of Economics, Second Edition is a text intended for a one-term course in economics for college students. It attempts to teach students of the analytic way of studying economics and provides the basics of the concept of political economy and uses this knowledge to explain the choice process in the public sector. The book presents a comprehensive survey of economics. It contains chapters that highlight the importance of the microincentive structure of macroeconomic markets; identifies the determinants of supply, as well as the impact of public policy on those determinants; and presents both adaptive and rational expectations theory. The linkage between production theory and the cost curves faced by the firm; examination of the market structure; and the role of regulation and deregulation are covered as well. Economics students will find the book very useful.
Preface
Acknowledgments
Part One The Economic Way of Thinking—An Introduction
Chapter 1 The Economic Approach
What Is Economics About?
The Economic Way of Thinking
Myths of Economics: "Economic Analysis Assumes that People Act Only Out of Selfish Motives. It Rejects the Humanitarian Side of Humankind."
Positive and Normative Economics
What Do Economists Do?
Outstanding Economists: Adam Smith (1723—1790) and the Historical Roots of Economics
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 2 Some Tools of the Economist
Opportunity Cost Is the Highest Valued Opportunity Lost
The Production Possibilities Curve
Trade Tips and Comparative Advantage
Division of Labor, Specialization, and Exchange in Accordance with the Law of Comparative Advantage
Three Economizing Decisions Facing All Nations: What, How, and For Whom?
Two Methods of Making Decisions—The Market and Government Planning
Myths of Economics: "In Exchange, when Someone Gains, Someone Else Must Lose. Trading is a Zero-Sum Game."
Outstanding Economist: David Ricardo (1772-1823) and the Early Followers of Smith
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 3 Supply, Demand, and the Market Process
Scarcity Necessitates Rationing
Consumer Choice and the Law of Demand
Producer Choice and the Law of Supply
Markets and the Coordination of Supply and Demand
Shifts in Demand and Changes in Quantity Demanded
Shifts in Supply
Outstanding Economist: Alfred Marshall (1842-1924)
Time and the Adjustment Process
Repealing the Laws of Supply and Demand
How the Market Answers the Three Basic Economic Questions
The Communicating, Coordinating, and Motivating Functions of the Market
Myths of Economics: "Rent Controls are an Effective Method of Ensuring Adequate Housing at a Price the Poor can Afford."
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 4 Supply and Demand for the Public Sector
Ideal Economic Efficiency
Why Might the Invisible Hand Fail?
The Economics of Collective Action
Conflicts between Good Economics and Good Politics
Outstanding Economist: James Buchanan (1919- )
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Part Two Macroeconomics
Chapter 5 Taking the Nation's Economic Pulse
Micro- and Macroeconomics
The Concept of GNP
Two Measures of GNP and Why They Are Equal
Depreciation and Net National Product
Other Related Income Measures
What GNP Does Not Consider
What GNP Measures
Employment and Economic Instability
Three Types of Employment
What is Full Employment?
The Economics of Inflation
Who Gains and Who Loses from Inflation?
Does the CPI Overstate the Inflation Rate?
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 6 Aggregate Demand and Equilibrium in a Simple Keynesian Model
Consumption As a Component of Aggregate Demand
Investment As a Component of Aggregate Demand
Government Expenditures As a Component of Aggregate Demand
Net Exports As a Component of Aggregate Demand
The Keynesian Concept of Macroequilibrium
The Multiplier Principle
The Paradox of Thrift
Investment Instability and the Accelerator
The Accelerator-Multiplier Interaction and the Role of Inventories
The Central Theme of Keynes
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 7 Fiscal Policy and Demand Management
Fiscal Policy in Historical Perspective
Demand Stimulus to Combat Recession
Fiscal Policy for Dealing with Inflation
Fiscal Policy and Budget Deficits
Practical Limitation of Demand-Management Strategy
Automatic Stabilizers
Outstanding Economist: James Tobin (1918- )
Perspectives in Economics: Fact and Fiction about the National Debt
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 8 Aggregate Supply, Fiscal Policy, and Stabilization
The Determinants of Aggregate Supply
The Aggregate Supply Curve for the Constrained Economy
Fiscal Policy, Aggregate Demand, and Aggregate Supply
What is Supply-Side Economics?
What Do We Know about Fiscal Policy?
The Dual Problems of Macroeconomics
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Addendum: Macroequilibrium within the Price—Quantity Framework
Chapter 9 Money and the Banking System
What Is Money?
The Business of Banking
The Federal Reserve System
The Deregulation and Monetary Control Act
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 10 Money, Keynesianism, and Monetarism
Historical Background on the Importance of Money
How Monetary Policy Works—The Modern Keynesian View
The Modern Monetarist View
The Basic Propositions of Monetarism
The Monetarist-Keynesian Controversy in Perspective
Perspectives in Economics: Budget Deficits and Our Economy
Chapter Learning Objectives
The Economic Way of Thinking— Discussion Questions
Chapter 11 Expectations and the Limits of Macropolicy
The Phillips Curve—The Dream and the Reality
Adaptive Expectations and the Shifting Phillips Curve
Politics, Expectations, and the Spiraling Upward of the Inflation Rate
Rational Expectations
Interest Rates and the Expected Rate of Inflation
Pulling It All Together
New Directions in Macroeconomic Policy
A Microeconomic Approach to Macroeconomic Problems
Perspectives in Economics: The Reagan Tax Cut and Welfare for the Rich
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Part Three Microeconomics
Chapter 12 Demand and Consumer Choice
Choice and Individual Demand
The Elasticity of Demand
Determinants of Specific Preferences—Why Do Consumers Buy That?
Outstanding Economist: John Kenneth Galbraith (1908- )
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Addendum: Consumer Choice and Indifference Curves
Chapter 13 Cost and the Supply of Goods
Organization of the Business Firm
The Role of Costs
Short Run and Long Run
Economic and Accounting Cost—A Hypothetical Example
Costs in the Short Run
Costs in the Long Run
What Factors Cause the Firm's Cost Curves to Shift?
Costs and the Economic Way of Thinking
Myths of Economics: "A Good Business Decision Maker will never Sell a Product for Less than its Production Costs."
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 14 Pure Competition and Monopoly
Competition, Its Meaning and Significance
The Model of Pure Competition
The Workings of the Competitive Model
Output Adjustments and Long-Run Equilibrium
Efficiency and the Competitive Model
Monopoly—The Other Market Extreme
Price Discrimination
Why Is Monopoly "Bad"?
Monopoly and Competition
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 15 The Intermediate Cases: Monopolistic Competition and Oligopoly
Characteristics of Monopolistic Competition
Price and Output under Monopolistic Competition
Comparing Pure and Monopolistic Competition
Outstanding Economist: Joan Robinson (1903-1983)
Real-World Monopolistic Competitors
Characteristics of Oligopoly
Price and Output under Oligopoly
Concentration and Real-World Oligopolistic Power
Myths of Economics: "The Prices of Most Goods are Unnecessarily Inflated by at Least 25 Percent as a Result of the High Rate of Profit of Producers."
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 16 Business Structure, Regulation, and Deregulation
The Structure of the U.S. Economy
Antitrust Legislation—The Policy Objectives
Theories of Regulation and Regulatory Policy
The Regulatory Effects of Motor Vehicle Inspection
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 17 The Supply of and Demand for Productive Resources
Human and Nonhuman Resources
The Demand for Resources
Marginal Productivity and the Firm's Hiring Decision
Marginal Productivity, Demand, and Economic Justice
The Supply of Resources
Supply, Demand, and Resource Prices
Outstanding Economist: Gary Becker (1930- )
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 18 Earnings, Skill Acquisition, and the Job Market
Why Do Earnings Differ?
Is Discrimination Profitable to the Employer?
Productivity and the General Level of Wages
Myths of Economics: "Automation is the Major Cause of Unemployment. If we Keep Allowing Machines to Replace People, we are Going to Run Out of Jobs."
How Is the Economic Pie Divided?
Perspectives in Economics: The Minimum Wage—An Economic Appraisal
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Part Four Public Choice
Chapter 19 Problem Areas for the Market
External Effects and the Market
The Importance of Communal and Private Property Rights
Public Sector Responses to Externalities
Market Failure: Public Goods
Outstanding Economist: Allen Kneese (1930— )
Market Failure: Poor Information
Looking Ahead
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Chapter 20 Public Choice: Gaining from Government and Government Failure
Voter's Demand for Political Representation
Supply, Profits, and the Political Entrepreneur
The Demand for Public Sector Action
The Economics of Government Failure
Why General Motors Receives Better Signals Than Congress
The Economic Analysis of the Public Sector
Looking Ahead
Chapter Learning Objectives
Perspectives in Economics: Dealing with Special Interests
The Economic Way of Thinking—Discussion Questions
Part Five International Economics
Chapter 21 Gaining from International Trade
The Composition of the International Sector
Comparative Advantage and Trade between Nations
Restrictions to Trade
Myths of Economics: "Free Trade with Low-Wage Countries such as China and India would Cause the Wages of U.S. Workers to Fall."
Frederic Bastiat on Obstacles to Gains from Trade
Chapter Learning Objectives
The Economic Way of Thinking—Discussion Questions
Index
Credits
- No. of pages: 502
- Language: English
- Edition: 2
- Published: January 1, 1985
- Imprint: Academic Press
- eBook ISBN: 9781483262949
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