Untangle the jargon and understand how you're involved in everyday economics If you want to get to grips with the basics of economics and understand a subject that affects British citizens on a daily basis, then look no further than Economics For Dummies. This easy to understand guide takes you through the world of economics from understanding micro- and macroeconomics to demystifying complex topics such as capitalism and recession.
This updated edition walks you through the history, principles and theories of economics as well as breaking down all the complicated terminology, leaving you clued up on economics in no time.
Getting to grips - explore the science of economics and how people deal with scarcity
Keeping an eye on it - learn all about macroeconomics and how economists keep track of everything
Watch patterns emerge - understand why monitoring consumer behaviour is vital and all you need to know about microeconomics
Your recession guide - expert advice on recessions and a detailed look at why they occur
Open the book and find:
Why you should care about economics and how it affects you
Tools to help you understand a recession
A guide to seductive economic fallacies
All you need to know on monetary and fiscal policies
How supply and demand can be made easy
Why it's vital to track consumer choices
An in-depth look at a profit-maximising firm and the core of capitalism
Guidance on property rights and wrongs
Learn to:
Look through economic history and spot the trends
Understand micro- and macroeconomics
Get to grips with consumer behaviour and its influence on the economy
Spot the signs of a recession and see how economic decisions affect you
Author(s): Peter Antonioni; Sean Masaki Flynn
Series: For Dummies
Edition: 2 UK
Publisher: Wiley
Economics For Dummies, 2nd Edition
About the Authors
Dedication
Authors’ Acknowledgments
Contents at a Glance
Table of Contents
Introduction
About This Book
Conventions Used in This Book
What You’re Not to Read
Foolish Assumptions
How This Book Is Organised
Icons Used in This Book
Where to Go from Here
Part I: Economics: The Science of How People Deal with Scarcity
Chapter 1: What Does Economics Study? And Why Should You Care?
Considering a Little Economic History
Sending Macroeconomics and Microeconomics to Separate Corners
Framing Economics as the Science of Scarcity
Zooming Out: Macroeconomics and the Big Picture
Getting up Close and Personal: Microeconomics
Understanding How Economists Use Models and Graphs
Chapter 2: Cake or Ice Cream? Tracking Consumer Choices
Considering a Model of Human Behaviour
Maximising Happiness Is the Objective
Red Light: Examining Your Limitations
Making Your Final Choice
Exploring Limitations and Violations of the Economist’s Choice Model
Chapter 3: Producing the Right Stuff in the Right Way to Maximise Human Happiness
Reaching the Limit: Determining What’s Possible to Produce
Determining What Should Be Produced
Encouraging Technology and Innovation
Part II: The Science of Economic Growth and Stability
Chapter 4: Measuring the Macroeconomy: How Economists Keep Track of
Using GDP to Track the Economy
Introducing the GDP Equation
Understanding How International Trade Affects the Economy
Chapter 5: Inflation Frustration: Why More Money Isn’t Always a Good Thing
Buying an Inflation: The Risks of Too Much Money
Measuring Inflation: Price Indexes
Pricing the Future: Nominal and Real Interest Rates
Chapter 6: Understanding Why Recessions Happen
Examining the Business Cycle
Striving for Full-Employment Output
Returning to Y*: The Natural Result of Price Adjustments
Responding to Economic Shocks: Short-Run and Long-Run Effects
Heading toward Recession: Getting Stuck with Sticky Prices
Achieving Equilibrium with Sticky Prices: The Keynesian Model
Chapter 7: Fighting Recessions with Monetary and Fiscal Policy
Stimulating Demand to End Recessions
Generating Inflation: The Risk of Too Much Stimulation
Figuring Out Fiscal Policy
Dissecting Monetary Policy
Part III: The Science of Consumer and Firm Behaviour
Chapter 8: Supply and Demand Made Easy
Making Sense of Markets
Deconstructing Demand
Sorting Out Supply
Interacting Supply and Demand to Find Market Equilibrium
Adjusting to New Market Equilibriums When Supply or Demand Changes
Constructing Impediments to Market Equilibrium
Chapter 9: Getting to Know Homo Ecoonomicus, the Utility-Maximising Consumer
Knowing the Name of the Game: Constrained Optimisation
Finding a Common Denominator to Measure Happiness: Utility
Getting Less from More: Diminishing Marginal Utility
Choosing among Many Options When Facing a Limited Budget
Deriving Demand Curves from Diminishing Marginal Utility
Chapter 10: The Core of Capitalism: The Profit-Maximising Firm
Maximising Profits Is a Firm’s Goal
Facing Competition
Analysing a Firm’s Cost Structure
Comparing Marginal Revenues with Marginal Costs
Pulling the Plug: When Producing Nothing Is Your Best Bet
Chapter 11: Why Economists Love Free Markets and Competition
The Beauty of Competitive Free Markets: Ensuring That Benefits Exceed Costs
When Free Markets Lose Their Freedom: Dealing with Deadweight Losses
Hallmarks of Perfect Competition: Zero Profits and Lowest Possible Costs
Chapter 12: Monopolies: How Badly Would You Behave If You Had No Competition?
Examining Profit-Maximising Monopolies
Comparing Monopolies with Competitive Firms
Considering Examples of Good Monopolies
Regulating Monopolies
Chapter 13: Oligopoly and Monopolistic Competition: Middle Grounds
Choosing to Compete or Collude
Cartel Behaviour: Trying to Imitate Monopolists
Understanding the Prisoner’s Dilemma Model
Applying the Prisoner’s Dilemma to Cartels
Regulating Oligopolies
Studying a Hybrid: Monopolistic Competition
Chapter 14: Property Rights and Wrongs
Allowing Markets to Reach Socially Optimal Outcomes
Examining Externalities: The Costs and Benefits Others Feel from Our Actions
Taking in the Tragedy of the Commons
Chapter 15: Market Failure: Asymmetric Information and Public Goods
Facing Up to Asymmetric Information
Providing Public Goods
Part IV: The Part of Tens
Chapter 16: Ten (Or so) Famous Economists
Adam Smith
David Ricardo
Karl Marx
Alfred Marshall
John Maynard Keynes
Kenneth Arrow and Gerard Debreu
Milton Friedman
Paul Samuelson
Robert Solow
Gary Becker
Robert Lucas
Chapter 17: Ten Seductive Economic Fallacies
The Lump of Labour Fallacy
The World Is Facing an Overpopulation Problem
The Fallacy of Confusing Sequence with Causation
Protectionism Is the Best Solution to Foreign Competition
The Fallacy of Composition
If It’s Worth Doing, Do It 100 Per Cent
Free Markets Are Dangerously Unstable
Low Foreign Wages Mean That Rich Countries Can’t Compete
Tax Rates Don’t Affect Work Effort
Forgetting That Policies Have Unintended Consequences Too
Chapter 18: Ten Economic Ideas to Hold Dear
Society Is Better Off When People Pursue Their Own Interests
Free Markets Require Regulation
Economic Growth Depends on Innovation
Freedom and Democracy Make Us Richer
Education Raises Living Standards
Protecting Intellectual Property Rights Promotes Innovation
Weak Property Rights Cause Many Environmental Problems
International Trade Is a Good Thing
Free Enterprise Has a Hard Time Providing Public Goods
Preventing Inflation Is Easy(ish)
Appendix: Glossary
Index
