Microeconomics 1e

N. Gregory Mankiw, Harvard University
Mark P Taylor, University of Warwick
ISBN-13: 9781844806676
ISBN: 1844806677

[Purchase this ebook]

This is the UK and European version of Harvard professor Greg Mankiw's best-selling and highly regarded US economics text, Microeconomics. Professor Mankiw's classic text has been adapted and developed by a leading European economist, Professor Mark Taylor of Warwick University. Features that made the US text so successful with students and lecturers will continue to add value to your learning experience.

Chapter Abstracts

• Ch. 1 Ten Principles of Economics  [Purchase this echapter]
  Chapter One covers how interactions among people and trade can be mutually beneficial, how the government can potentially improve market outcomes if there is some market failure or if the market outcome is inequitable; how money growth is the ultimate source of inflation and how society faces a short-run trade-off between inflation and unemployment
• Ch. 2 Thinking Like an Economist  [Purchase this echapter]
  Chapter Two covers microeconomics and macroeconomics; how the normative statements of economists acting more as policy advisors than scientists; how economists who advise policy makers offer conflicting advice either because of differences in scientific judgements or because of differences in values and how at other times, economists are united in the advice they offer, but policy makers may choose to ignore it
• Ch. 3 Interdependence and the Gains from Trade  [Purchase this echapter]
  Chapter Three covers the two ways to compare the ability of two people in producing a good; how the gains from trade are based on comparative advantage, not absolute advantage; how trade makes everyone better off because it allows people to specialize in those activities in which they have a comparative advantage, how the principle of comparative advantage applies to countries as well as to people and how economists use the principle of comparative advantage to advocate free trade among countries
• Ch. 4 The Market Forces of Supply and Demand  [Purchase this echapter]
  Chapter Four covers how the demand curve shows how the quantity of a good demanded depends on the price; how in addition to price, other determinants of how much producers want to sell include input prices, technology,expectations and the number of sellers; how the intersection of the supply and demand curves determines the market equilibrium; how the behaviour of buyers and sellers naturally drives markets toward their equilibrium; how to analyse how any event influences a market, using the supply and demand diagram to examine how the event affects the equilibrium price and quantity and how in market economies, prices are the signals that guide economic decisions and thereby allocate scarce resources
• Ch. 5 Elasticity and Its Application  [Purchase this echapter]
  Chapter Five covers the tools of supply and demand in analysing many of the most important events and policies that shape the economy. After this chapter you will be well on your way to becoming an economist
• Ch. 6 Supply, Demand, and Government Policies  [Purchase this echapter]
  Chapter Six covers the laws of supply and demand and the laws enacted by governments and how these laws interact, price controls and taxes in various markets in the economy, their effects frequently debated in the press and among policy makers, how when analysing government policies, supply and demand are the first and most useful tools of analysis
• Ch. 7 Consumers, Producers, and the Efficiency of Markets  [Purchase this echapter]
  Chapter Seven covers the basic tools of welfare economics - consumer and producer surplus - and the efficiency of free markets, the forces of supply and demand to allocate resources efficiently so that buyer and seller are led by an invisible hand to an equilibrium that maximizes the total benefits to buyers and sellers, how competition is sometimes far from perfect when a single buyer or seller may be able to control market prices, how market power can cause markets to be inefficient by keeping price and quantity away from the equilibrium of supply and demand, how welfare economics and market efficiency can be used to shed light on the effects of various government policies
• Ch. 8 Application: The Costs of Taxation  [Purchase this echapter]
  Chapter Eight covers tax and how high the price of civilized society can be, how when the government imposes taxes on buyers or sellers of a good, society loses some of the benefits of market efficiency and how taxes are costly to market participants not only because taxes transfer resources from those participants to the government, but also because they alter incentives and distort market outcomes
• Ch. 9 Application: International Trade  [Purchase this echapter]
  Chapter Nine covers the effects of free trade, the effects and indications of a low domestic price and a high domestic price, the effect on producers and consumers when a country allows trade, how a tariff - a tax on imports - moves a market closer to the equilibrium that would exist without trade and, therefore, reduces the gains from trade, how an import quota - a limit on imports - has effects that are similar to those of a tariff, various arguments for restricting trade: protecting jobs, defending national security, helping infant industries, preventing unfair competition and responding to foreign trade restrictions
• Ch. 10 Externalities  [Purchase this echapter]
  Chapter Ten covers how a transaction between a buyer and seller directly affects a third party, how negative externalities, such as pollution, cause the socially optimal quantity in a market to be less than the equilibrium quantity, how those affected by externalities can sometimes solve the problem privately including the Coase theorem, when private parties cannot adequately deal with external effects, such as pollution and how the government internalizes an externality using Pigovian taxes and the public policy to issue permits
• Ch. 11 Public Goods and Common Resources  [Purchase this echapter]
  Chapter Eleven covers how goods differ in whether they are excludable or rival, how public goods are neither rival nor excludable and examples of public goods and how common resources are rival but not excludable and how governments try to limit the use of common resources
• Ch. 12 The Design of the Tax System  [Purchase this echapter]
  Chapter Twelve covers how governments raises revenue using various taxes, how the efficiency of a tax system refers to the costs that it imposes on taxpayers, how the equity of a tax concerns whether the tax burden is distributed fairly among the population and how when considering changes in the tax laws, policy makers often face a trade-off between efficiency and equity
• Ch. 13 The Costs of Production  [Purchase this echapter]
  Chapter Thirteen covers how the goal of firms is to maximize profit, how when analysing a firm's behaviour, it is important to include all the opportunity costs of production, how a firm's costs reflect its production process, how a firm's total costs can be divided between fixed costs and variable costs, how from a firm's total cost, two related measures of cost are derived, how when analysing firm behaviour, it is often useful to graph average total cost and marginal cost and how a firm's costs often depend on the time horizon being considered
• Ch. 14 Firms in Competitive Markets  [Purchase this echapter]
  Chapter Fourteen covers how because a competitive firm is a price taker, its revenue is proportional to the amount of output it produces, how to maximize profit, a firm chooses a quantity of output such that marginal revenue equals marginal cost, how in the short run when a firm cannot recover its fixed costs, the firm will choose to shut down temporarily if the price of the good is less than average variable cost and how in the long run when the firm can recover both fixed and variable costs, it will choose to exit if the price is less than average total cost, how in a market with free entry and exit, profits are driven to zero in the long run and how changes in demand have different effects over different time horizons
• Ch. 15 Monopoly  [Purchase this echapter]
  Chapter Fifteen covers how a monopoly is a firm that is the sole seller in its market and how because a monopoly is the sole producer in its market, it faces a downward sloping demand curve for its productm how like a competitive firm, a monopoly firm maximizes profit by producing the quantity at which marginal revenue equals marginal cost, how a monopolist's profit-maximizing level of output is below the level that maximizes the sum of consumer and producer surplus, how policy makers can respond to the inefficiency of monopoly behaviour in four ways: competition law, more competitive industry, regulate the prices or turn the monopolist into a government-run enterprise, and how monopolists often can raise their profits by charging different prices for the same good based on a buyer's willingness to pay
• Ch. 16 Oligopoly  [Purchase this echapter]
  Chapter Sixteen covers how oligopolists maximize their total profits by forming a cartel and acting like a monopolist, how a prisoners' dilemma shows that self-interest can prevent people from maintaining cooperation, even when cooperation is in their mutual interest and how policy makers use competition law to prevent oligopolies from engaging in behaviour that reduces competition
• Ch. 17 Monopolistic Competition  [Purchase this echapter]
  Chapter Seventeen covers a monopolistically competitive market is characterized by three attributes: many firms, differentiated products and free entry, how the equilibrium in a monopolistically competitive market differs from that in a perfectly competitive market in two related ways: each firm in a monopolistically competitive market has excess capacity and each firm charges a price above marginal cost, how monopolistic competition does not have all the desirable properties of perfect competition and how the product differentiation inherent in monopolistic competition leads to the use of advertising and brand names
• Ch. 18 The Markets for the Factors of Production  [Purchase this echapter]
  Chapter Eighteen covers the economy's income is distributed in the markets for the three factors of production, how the demand for factors, such as labour, is a derived demand that comes from firms that use the factors to produce goods and services, how the supply of labour arises from individuals' trade-off between work and leisure, how the price paid to each factor adjusts to balance the supply and demand for that factor and because factors of production are used together, the marginal product of any one factor depends on the quantities of all factors that are available
• Ch. 19 Earnings and Discrimination  [Purchase this echapter]
  Chapter Nineteen covers how workers earn different wages for many reasons, how workers with more human capital get paid more than workers with less human capital, how although years of education, experience and job characteristics affect earnings as theory predicts, there is much variation in earnings that cannot be explained by things that economists can measure, how some economists have suggested that more educated workers earn higher wages not because education raises productivity but because workers with high natural ability use education as a way to signal their high ability to employers, how wages are sometimes pushed above the level that brings supply and demand into balance amd the three reasons for this, how some differences in earnings are attributable to discrimination on the basis of race, sex or other factors, how competitive markets tend to limit the impact of discrimination on wages
• Ch. 20 Income Inequality and Poverty  [Purchase this echapter]
  Chapter Twenty covers how data on the distribution of income show wide disparity in industrialized economies, how because in-kind transfers, the economic life cycle, transitory income and economic mobility are so important for understanding variation in income, it is difficult to gauge the degree of inequality in our society using data on the distribution of income in a single year, why political philosophers differ in their views about the role of government in altering the distribution of income (John Stuart Mill, John Rawls and Robert Nozick), and how various policies aim to help the poor - minimum wage laws, social security, negative income taxes and in-kind transfers
• Ch. 21 The Theory of Consumer Choice  [Purchase this echapter]
  Chapter Twenty One covers how a consumer's budget constraint shows the possible combinations of different goods he can buy given his income and the prices of the goods, how the consumer's indifference curves represent his preferences, how the consumer optimizes by choosing the point on his budget constraint that lies on the highest indifference curve, how when the price of a good falls, the impact on the consumer's choices can be broken down into an income effect and a substitution effect and how the theory of consumer choice can be applied in many situations
• Ch. 22 Frontiers of Microeconomics  [Purchase this echapter]
  Chapter Twenty Two covers how in many economic transactions, information is asymmetric, how although government policy can sometimes improve market outcomes, governments are themselves imperfect institutions and how the study of psychology and economics reveals that human decision making is more complex than is assumed in conventional economic theory