Principles of Microeconomics for AP® Courses 2e

Principles of Microeconomics for AP® Courses 2e......Page 3
3. About Principles of Microeconomics for AP® Courses 2e......Page 9
4. Additional resources......Page 13
5. About the authors......Page 14
Chapter 1. Welcome to Economics!......Page 17
1.1. What Is Economics, and Why Is It Important?*......Page 18
1.2. Microeconomics and Macroeconomics*......Page 22
1.3. How Economists Use Theories and Models to Understand Economic Issues*......Page 23
1.4. How To Organize Economies: An Overview of Economic Systems*......Page 26
Glossary......Page 31
Chapter 2. Choice in a World of Scarcity......Page 35
2.1. How Individuals Make Choices Based on Their Budget Constraint*......Page 36
2.2. The Production Possibilities Frontier and Social Choices*......Page 41
2.3. Confronting Objections to the Economic Approach*......Page 46
Glossary......Page 50
Chapter 3. Demand and Supply......Page 53
3.1. Demand, Supply, and Equilibrium in Markets for Goods and Services*......Page 54
3.2. Shifts in Demand and Supply for Goods and Services*......Page 60
3.3. Changes in Equilibrium Price and Quantity: The Four-Step Process*......Page 69
3.4. Price Ceilings and Price Floors*......Page 75
3.5. Demand, Supply, and Efficiency*......Page 79
Glossary......Page 83
Chapter 4. Labor and Financial Markets......Page 91
4.1. Demand and Supply at Work in Labor Markets*......Page 92
4.2. Demand and Supply in Financial Markets*......Page 100
4.3. The Market System as an Efficient Mechanism for Information*......Page 106
Glossary......Page 111
Chapter 5. Elasticity......Page 115
5.1. Price Elasticity of Demand and Price Elasticity of Supply*......Page 116
5.2. Polar Cases of Elasticity and Constant Elasticity*......Page 121
5.3. Elasticity and Pricing*......Page 123
5.4. Elasticity in Areas Other Than Price*......Page 131
Glossary......Page 135
Chapter 6. Consumer Choices......Page 141
6.1. Consumption Choices*......Page 142
6.2. How Changes in Income and Prices Affect Consumption Choices*......Page 149
6.3. Labor-Leisure Choices*......Page 154
6.4. Intertemporal Choices in Financial Capital Markets*......Page 159
Glossary......Page 166
Chapter 7. Production, Costs and Industry Structure......Page 171
7.1. Explicit and Implicit Costs, and Accounting and Economic Profit*......Page 173
7.2. Production in the Short Run*......Page 174
7.3. Costs in the Short Run*......Page 180
7.4. Production in the Long Run*......Page 187
7.5. Costs in the Long Run*......Page 188
Glossary......Page 197
Chapter 8. Perfect Competition......Page 203
8.1. Perfect Competition and Why It Matters*......Page 204
8.2. How Perfectly Competitive Firms Make Output Decisions*......Page 205
8.3. Entry and Exit Decisions in the Long Run*......Page 220
8.4. Efficiency in Perfectly Competitive Markets*......Page 222
Glossary......Page 225
Chapter 9. Monopoly......Page 231
9.1. How Monopolies Form: Barriers to Entry*......Page 232
9.2. How a Profit-Maximizing Monopoly Chooses Output and Price*......Page 236
Glossary......Page 247
Chapter 10. Monopolistic Competition and Oligopoly......Page 251
10.1. Monopolistic Competition*......Page 252
10.2. Oligopoly*......Page 260
Glossary......Page 266
Chapter 11. Monopoly and Antitrust Policy......Page 271
11.1. Corporate Mergers*......Page 272
11.2. Regulating Anticompetitive Behavior*......Page 278
11.3. Regulating Natural Monopolies*......Page 280
11.4. The Great Deregulation Experiment*......Page 283
Glossary......Page 286
Chapter 12. Environmental Protection and Negative Externalities......Page 291
12.1. The Economics of Pollution*......Page 292
12.2. Command-and-Control Regulation*......Page 296
12.3. Market-Oriented Environmental Tools*......Page 297
12.4. The Benefits and Costs of U.S. Environmental Laws*......Page 301
12.5. International Environmental Issues*......Page 304
12.6. The Tradeoff between Economic Output and Environmental Protection*......Page 305
Glossary......Page 307
Chapter 13. Positive Externalities and Public Goods......Page 317
13.1. Why the Private Sector Underinvests in Innovation*......Page 319
13.2. How Governments Can Encourage Innovation*......Page 322
13.3. Public Goods*......Page 325
Glossary......Page 330
Chapter 14. Poverty and Economic Inequality......Page 335
14.1. Drawing the Poverty Line*......Page 336
14.2. The Poverty Trap*......Page 339
14.3. The Safety Net*......Page 342
14.4. Income Inequality: Measurement and Causes*......Page 346
14.5. Government Policies to Reduce Income Inequality*......Page 352
Glossary......Page 357
Chapter 15. Labor Markets and Income......Page 363
15.1. Market Power on the Supply Side of Labor Markets: Unions*......Page 364
15.2. Employment Discrimination*......Page 371
15.3. Immigration*......Page 377
Glossary......Page 381
Chapter 16. Information, Risk, and Insurance......Page 385
16.1. The Problem of Imperfect Information and Asymmetric Information*......Page 386
16.2. Insurance and Imperfect Information*......Page 392
Glossary......Page 400
Chapter 17. Financial Markets......Page 405
17.1. How Businesses Raise Financial Capital*......Page 407
17.2. How Households Supply Financial Capital*......Page 410
17.3. How to Accumulate Personal Wealth*......Page 422
Glossary......Page 427
Chapter 18. Public Economy......Page 433
18.1. Voter Participation and Costs of Elections*......Page 434
18.2. Special Interest Politics*......Page 436
18.3. Flaws in the Democratic System of Government*......Page 439
Glossary......Page 444
Chapter 19. International Trade......Page 447
19.1. What Happens When a Country Has an Absolute Advantage in All Goods*......Page 448
19.2. Intra-industry Trade between Similar Economies*......Page 453
19.3. The Benefits of Reducing Barriers to International Trade*......Page 456
19.4. What Happens When a Country Has an Absolute Advantage in All Goods*......Page 458
Glossary......Page 463
Chapter 20. Globalization and Protectionism......Page 469
20.1. Protectionism: An Indirect Subsidy from Consumers to Producers*......Page 470
20.2. International Trade and Its Effects on Jobs, Wages, and Working Conditions*......Page 477
20.3. Arguments in Support of Restricting Imports*......Page 480
20.4. How Governments Enact Trade Policy: Globally, Regionally, and Nationally*......Page 485
20.5. The Tradeoffs of Trade Policy*......Page 489
Glossary......Page 492
A.1. Algebraic Models......Page 497
A.3. Displaying Data Graphically and Interpreting the Graph......Page 501
A.5. Review Questions......Page 512
B.1. What Is an Indifference Curve?......Page 513
B.2. Utility-Maximizing with Indifference Curves......Page 515
B.3. Changes in Income......Page 516
B.4. Responses to Price Changes: Substitution and Income Effects......Page 517
B.5. Indifference Curves with Labor-Leisure and Intertemporal Choices......Page 518
B.6. Sketching Substitution and Income Effects......Page 521
B.7. Key Concepts and Summary......Page 524
B.8. Review Questions......Page 525
C.1. Applying Present Discounted Value to a Stock......Page 527
C.3. Other Applications......Page 528
Chapter 2......Page 531
Chapter 3......Page 532
Chapter 4......Page 534
Chapter 5......Page 537
Chapter 6......Page 539
Chapter 7......Page 542
Chapter 8......Page 543
Chapter 10......Page 544
Chapter 11......Page 545
Chapter 12......Page 546
Chapter 13......Page 550
Chapter 14......Page 551
Chapter 15......Page 555
Chapter 17......Page 556
Chapter 19......Page 557
Chapter 20......Page 559
References......Page 561
Index......Page 571
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