Economics

Essentials of economics

1. What is economics all about?

What is economics about?

The basis for economics

Scarcity

Opportunity cost

Marginal analysis

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2. How to use graphs in economics

Reading graphs

How two variables are related

Plotting graphs

measuring the slope

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3. Supply and demand : part one

How to study supply and demand

Price

Demand and the law of demand

The demand curve

Supply and the law of supply

The supply curve

Market equilibrium

Studying demand and supply curves

price floors

Price ceilings

Effects of price ceilings and floors

On the nature of the price system

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4. Supply and demand : part two

The difference between economic shifts and movements

Factors shifting demand

Factors shifting supply

How to avoid mistakes in analyzing supply and demand

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Macroeconomics : aggregate supply and demand

5. Measuring national output

Introduction

Basic premises

The circular flow of income

Measuring GDP

GDP and national welfare

National income accounting formulas

Applying the national income premises

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6. Inflation and unemployment

Measuring inflation

The three main price indexes

Problems with price indexes

The meaning of inflation

How inflation affects real income

The economic costs of inflation

Measuring unemployment

The effect of recession

The types and costs of unemployment

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7. Introduction to macroeconomics : output, growth, and capital

What is macroeconomics?

Recessions

Why recessions occur

Full-employment output

The level of current output

Growth accounting

Creation of capital

Capital markets

Will savings be invested?

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8. Aggregate demand and supply : the key to macroeconomics

Aggregate demand and supply

Aggregate demand

Aggregate supply (short run)

The effects of shifts in aggregate demand and supply

Aggregate supply (long run)

How to apply aggregate demand and supply

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9. Aggregate demand in the private sector : the Keynesian model

The basic Keynesian model

Consumption function

Investment function

Equilibrium in aggregate demand - Applying the Keynesian model

Shifts in investment

Determinants of consumption

Determinants of investment

Factors shifting the total spending curve

Plotting aggregate demand

The Keynesian model

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10. Aggregate supply and getting to full employment

Constructing the aggregate supply curve to get to full employment

Long-run equilibrium

From recession to full employment

From too little unemployment to full employment

The effects of employment on the spending multiplier

The natural rate of unemployment

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Macroeconomics : fiscal and monetary policy

11. Fiscal policy : government spending and taxation

What fiscal policy is

The effect of spending

The effect of taxation

The overall effects of spending and taxation

Limits of an active fiscal policy

The effect on aggregate supply and demand

Deficits : do they matter?

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12. The supply of money

What is money?

How money is measured

The Federal Reserve

Balance sheets and banks : federal and commercial

How the Fed controls the money supply - Taylor's rule : what does the Federal Reserve do?

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13. Money and aggregate demand

Money demand

The quantity theory of money

The long-run neutrality of money

How to predict inflation

The German hyperinflation

The short-run effects of money : the monetarist model

Keynesian model of the short-run effects of money

The long-run effects of money supply on interest rates

The spending multiplier and fiscal policy

Bonds : interest rates and prices

The differences between Keynesian and monetarist views

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14. Inflation and unemployment

What causes the short-run aggregate supply curve (AS) to shift?

The relationship between the AS curve and the Phillips curve

How shifts affect the AS curve and the Phillips curve

Visualizing the business cycle

Inflation and the Phillips curve

The business cycle

Can economic recovery be made faster?

Can inflation (at full employment) be reduced?

Does the Phillips curve tell the real story?

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15. Rational expectations and other models of the business cycle

Rational-expectations macroeconomics

Assumptions

Results

Rational-expectations model

An example of a rational-expectations model

Criticisms of rational expectations

Rational expectations, random walk, and the stock market

Real business cycle theory

Neo-Keynesian macroeconomics

Where does business cycle theory stand today?

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16. Open-market macroeconomics

Introduction

The key to understanding world trade

The exchange rate

The demand and supply of the dollar

The market for assets

Factors affecting the exchange rate

Other equations

Runs on currencies and capital flight

Fiscal and monetary policy in an open economy

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Microeconomics : consumer and cost

17. Elasticity

The price elasticity of demand

Measuring the price elasticity of demand

Elasticity and total revenue

Factors affecting elasticity

Pertaining to demand

Pertaining to supply

Interactions of demand and supply

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18. The theory of demand

Market and individual demand

The law of diminishing marginal utility

The law of equal marginal utility per dollar

Deriving the law of demand from the law of equal marginal utility per dollar

Income effects and substitution effects

Consumer surplus

Applications for business : principle of equal marginal benefit per unit

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19. Cost and output

Short- and long-run costs

Short-run costs

Long-run costs

Profits and costs

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Microeconomics : competition and monopoly

20. Competitive supply

Rules of basic decision making

Concerning costs

Concerning output

How competitive firms make decisions concerning costs and output

Rules of supply

The construction of the industry's short-run supply curve

Effects of costs on supply

Competition bids price down to cost

Short and long runs

Auction theory

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21. Assymmetric information

Adverse selection

The market for lemons

Market signaling

Moral hazard

Principal-agent problems

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22. Monopolies

Why do monopolies exist?

Basic elements

Marginal revenue

The output decision

Fallacies and facts

Price discrimination

Taxes and monopolies

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23. Between monopoly and competition

Perfectly contestable markets

Monopolistic competition

Oligopoly

Special models of oligopolies

Game theory and oligopoly

Forces that promote competition

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24. Game theory

Cooperation

Noncooperation

Nash equilibrium

Sequential games

Coordination games

Games and pay

Keynesian games

Evolutionary games

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25. Efficiency and regulation

The competitive process

The efficiency of competitive markets

The social loss from monopoly

Regulating monopoly

Vertical integration

Vertical integration and antitrust

Is monopoly bad?

When won't a competitive economy be efficient?

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Microeconomics : what people earn

26. Factor demand and productivity

How to measure productivity and profits

Determining marginal benefit by marginal revenue product

Determining marginal cost by marginal factor cost

The four cases combined

Efficiency

Income allocation

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27. Wages, labor markets, and unions

Workers and jobs

Model 1 : Workers alike, jobs alike

Model 2 : Workers alike, jobs different

Other models of differences in wages

Discrimination

Unions

Unions in price-taking firms

Unions and efficiency

Unions and monopsonistic employers

The minimum wage

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28. Rent, interest, and profits

Economic rent

Interest

Making investment decisions

Value of an asset

Economic profits

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Microeconomics : government and the economy

29. Public choice and externalities

Social optimality and free markets

Solutions to market failures caused by externalities

Public goods

An application : pollution control

Public choice

Dealing with special interests

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30. Government spending and taxation

Cost-benefit analysis of government spending

The economics of transfer payments

Taxation

Equity in taxes

Taxes and efficiency

Major distortions in our current tax codes

Some special taxes

Comparing taxes

Tax incidence and tax shifting

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International trade

31. International trade

When will a nation benefit from trade?

What goods should a nation trade?

The law of comparative advantage

Graphical analysis of comparative advantage

The effect of tariffs and quotas

Trade and unemployment

Arguments for tariffs

Factor price equalization

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Appendix

Web sites for economics

Indifference curve analysis

Glossary

List of abbreviations

Elements of accounting

The balance sheet

The income statement

How to overstate profit

Sources of economic data

Business cycle indicators

Review and additional material

The geometry of profit-maximizing

The algebra of income determination in the Keynesian model

Summary of macroeconomic models

Index.