Introduction to Economic Reasoning, 7th Edition

PART ONE. INTRODUCTION: SCARCITY AND THE ECONOMIC SYSTEM

Chapter 1. The Study of Economics
The Economic Problem
Cost-Benefit Analysis and Opportunity Cost
The Production Possibilities Curve
The Three Fundamental Questions
Five Economic Goals
Conflicts and Trade-Offs
Economic Theory and Policy
Economists and Conclusions
The Organization of the Text

Chapter 2. Economic Systems
The Model of Pure Capitalism
The Model of Pure Command Socialism
Mixed Economies: The Real-World Solution

PART TWO. MICROECONOMICS: MARKETS, PRICES, AND THE ROLE OF COMPETITION

Chapter 3. Demand and Supply: Price Determination in Competitive Markets
Demand
The Law of Demand
Determinants of Demand
Change in Quantity Demanded versus Change in Demand
Supply
The Law of Supply
Determinants of Supply
Change in Supply versus Change in Quantity Supplied
The Process of Price Determination
Changes in the Equilibrium Price
Economic Efficiency and the Role of Prices

Chapter 4. Applications Using Demand and Supply
Government Intervention in Pricing
Elasticity of Demand

Chapter 5. Costs and Decision Making
Explaining Human Behavior: The Role of Assumptions
The Importance of Marginal Analysis
The Improper Estimation of Costs
Business Decision Making and the Pursuit of Profit
Short-Run Costs of Production
The Cost Curves
Selecting the Profit-Maximizing Level of Output
Gas Stations, Fast Food, and the All-Night Grocery Store

Chapter 6. Price Taking: The Purely Competitive Firm
The Nature of Pure Competition
The Firm under Pure Competition
Profit Maximization in the Short Run
Profit Maximization in the Long Run
The Benefits of Pure Competition

Chapter 7. Price Searching: The Firm with Market Power
The Acquisition of Market Power
Price Searching
The Profit-Maximization Rule
Evaluating the Short-Run Profit or Loss
Barriers to Entry and Long-Run Profits
Price Searchers and Resource Allocation
Price Searchers and Economies of Scale

Chapter 8. Industry Structure and Public Policy
Industry Structure and Market Power
Pure Competition
Monopolistic Competition
Oligopoly
Monopoly
The Consequences of Monopoly or Oligopoly
Antitrust and Regulation

Chapter 9. Market Failure
Externalities as a Source of Market Failure
Market Failure and the Provision of Public Goods
Government Failure: The Theory of Public Choice

PART THREE. MACROECONOMICS: THE ECONOMY AS A WHOLE

Chapter 10. Measuring Aggregate Performance
Measuring Unemployment
Measuring Inflation
Measuring Total Output

Chapter 11. Aggregate Demand and Supply: The Model of the Self-Correcting Economy
Aggregate Demand
Changes in Aggregate Demand
Aggregate Supply
Changes in Aggregate Supply
The Equilibrium Output and Price Level
The Impact of Changes in Aggregate Demand or Supply
The Model of the Self-Correcting Economy

Chapter 12. Fiscal Policy
The Federal Budget
Classical Economics, the Great Depression, and John Maynard Keynes
The Existence of Unemployment or Inflation
Discretionary Fiscal Policy: Combating Unemployment or Inflation
Automatic Fiscal Policy: The Economy’s Automatic Stabilizers
Fiscal Policy and the Federal Budget
Issues Related to Fiscal Policy
The Public Debt

Chapter 13. Money, Banking, and Monetary Policy
What Is Money?
How Depository Institutions Create Money
The Federal Reserve System
Monetary Policy and the Federal Reserve
Money, Interest Rates, and the Level of Economic Activity
The Limits to Monetary Policy

Chapter 14. The Activist-Nonactivist Debate
The Activist Position: Keynes Revisited
The Nonactivist Position: The Monetarists
The Nonactivist Position: The New Classical Economists
A Different Form of Activism: Managing Aggregate Supply
Summing Up: Final Thoughts on Policy Activism

Chapter 15. Economic Growth: The Importance of the Long Run
Economic Growth and Why It Matters
Sources of Economic Growth
Policies to Promote Growth
Debates about Growth Policy

PART FOUR. INTERNATIONAL ECONOMICS: TRADE, EXCHANGE RATES, AND THE ROLE OF TRADE AGREEMENTS

Chapter 16. International Economics
Interdependent Economies and U.S. Trade
The Rationale for International Trade
Barriers to Trade
Reducing Barriers: The Role of Trade Agreements
Exchange Rates
Managing Exchange Rates

Glossary
Photo Credits
Index