Contemporary Economics: An Applications Approach / Edition 1

Contemporary Economics: An Applications Approach / Edition 1

by Robert Carbaugh

ISBN-10: 0324024398

ISBN-13: 9780324024395

Pub. Date: 05/28/2000

Publisher: South-Western

Concise presentation of microeconomic and macroeconomic theory are combined with contemporary applications in this text for a one-term survey of economics course for undergraduate nonmajors and for economics majors who wish to take an introductory course prior to taking a more rigorous course. Global coverage is integrated throughout the text, and application material…  See more details below


Concise presentation of microeconomic and macroeconomic theory are combined with contemporary applications in this text for a one-term survey of economics course for undergraduate nonmajors and for economics majors who wish to take an introductory course prior to taking a more rigorous course. Global coverage is integrated throughout the text, and application material on business and consumer economics examines topics and companies of interest to students, such as credit-card interest rates, Hollywood Video, electricity shortages, minimum wage, and new car costs. Consumer economics applications will be of special interest to students. The author teaches economics at Central Washington University. Annotation c. Book News, Inc., Portland, OR (

Product Details

Publication date:
Edition description:
Older Edition

Table of Contents

Part 1Introduction1
Chapter 1Scarcity and Choice3
What Is Economics?4
The Economic Way of Thinking6
Scarcity and Opportunity Cost10
Opportunity Costs and Choices12
The Production Possibilities Curve and Opportunity Cost13
Economic Growth17
Economic Decline20
Economic Growth: Trade-Offs Between Present and Future Consumption21
Economic Sanctions and Production Possibilities25
Fundamental Economic Questions and Economic Systems28
Part 2The Microeconomy39
Chapter 2Market Transactions: Demand and Supply Analysis41
Demand, Supply, and Equilibrium53
Shifts in Demand and Supply56
Supply and Demand Applications59
Chapter 3Demand and Supply Applications71
Price Elasticity of Demand72
Determinants of Price Elasticity of Demand73
Price Elasticity of Demand and Total Revenue76
Applications of Price Elasticity of Demand and Total Revenue77
Price Elasticity of Supply80
Price Ceilings and Price Floors82
Chapter 4Production and the Costs of Production99
Short Run Versus Long Run100
Production Function100
Short-Run Production101
Short-Run Production Costs105
Long-Run Production Costs111
Organizing Production: Is Bigger Better?113
Shifts in Cost Curves116
Cost Adjustments in Autos, Steel, and Airlines118
Costs and Profit123
Chapter 5Competition and Monopoly: Virtues and Vices133
Perfect Competition134
Perfect Competition: Profit Maximization and Loss Minimization in the Short Run136
Perfect Competition: Long-Run Adjustments and Economic Efficiency143
Barriers to Entry146
De Beers: The Diamond Monopoly151
Profit Maximization for a Monopoly152
The Case Against Monopoly156
Crane's Monopoly in the Currency Paper Market158
Legal Monopoly Examples160
Chapter 6Imperfect Competition173
Concentration Ratios174
Monopolistic Competition175
Price Discrimination182
Game Theory and Oligopoly Behavior188
Price and Output Under Oligopoly190
Mergers and Oligopoly195
Competition in the Commercial Jetliner Industry: Boeing Versus Airbus196
Potential Competition and Contestable Markets198
Chapter 7Government and Markets207
Market Failure208
Monopoly Power209
Antitrust Policy209
Economic Regulation and Deregulation215
Public Utility Regulation217
Spillover Effects221
Social Regulation225
Environmental Regulatory Policies and International Competitiveness228
Public Goods232
Inadequate Information233
Economic Inequality236
Chapter 8Labor Markets243
Labor Market Equilibrium244
The Minimum Wage250
Popeyes' Restaurants Fret over How to Handle a Minimum-Pay Rise253
Labor Unions256
Are International Trade and Immigration an Opportunity or a Threat to Workers?266
Part 3The Macroeconomy281
Chapter 9The Mixed Economy of the United States283
Households as Income Receivers284
Households as Spenders286
The Business Sector287
Government in the Mixed Economy289
Social Security and Medicare294
Can the Stock Market Save Social Security?296
Government Finance300
Principles of Taxation304
Progressive, Regressive, and Proportional Taxes305
The U.S. Tax Structure307
Reforming the U.S. Tax System310
Chapter 10Gross Domestic Product and Economic Growth321
Measuring an Economy's Output322
Gross Domestic Product322
The Components of GDP324
What GDP Does Not Measure326
Real GDP Versus Nominal GDP327
Long-Run Economic Growth329
What Determines Economic Growth331
The Productivity Slowdown335
Achieving Faster Growth: The Role of Government338
Industrial Policy: Targeting and Subsidizing Specific Industries341
Concerns over Future Economic Growth342
East Asia's Growth Strategy344
Chapter 11The Business Cycle, Unemployment, and Inflation353
Business Cycles354
Who Benefits from and Who Is Hurt by Inflation378
Effects of Severe Inflation383
Causes of Inflation384
Cost of Living: These Are the Good Old Days385
Chapter 12Macroeconomic Instability: Aggregate Demand and Aggregate Supply393
Stability of the Macroeconomy394
Aggregate Demand and Aggregate Supply396
Aggregate Demand396
The Multiplier Effect400
Aggregate Supply402
The Origins of Recession406
The Origins of Inflation Revisited409
Chapter 13Fiscal Policy and the Federal Budget421
The Federal Budget422
Fiscal Policy422
Fiscal Policy and Aggregate Demand423
Fiscal Policy in Action427
Automatic Stabilizers429
Problems of Fiscal Policy431
Fiscal Policy and Aggregate Supply435
Federal Deficit and Federal Debt438
Trends in Federal Debt439
Is the Federal Debt Good or Bad?442
Would a Balanced-Budget Amendment Help?445
Do Americans Really Want a Balanced Federal Budget?446
Chapter 14Money and the Banking System455
The Meaning of Money456
Shopping for a Credit Card458
U.S. Money Supply461
What Backs the Money Supply?468
Measuring the Money Supply470
The Banking System473
Types of Savings Accounts474
The Business of Banking478
The Process of Money Creation480
Why Are Banks Regulated?482
The Federal Deposit Insurance Corporation482
Chapter 15The Federal Reserve and Monetary Policy491
The Federal Reserve System492
Monetary Policy Instruments497
Shifting Aggregate Demand505
Preventing Financial Panics508
Monetary Policy in an International Economy512
Monetary Policy: Advantages and Disadvantages513
Free Money Didn't Nudge the Japanese Economy516
Fixed Rules or Discretion?520
Should Congress Reduce the Independence of the Federal Reserve?521
Part 4The International Economy529
Chapter 16The United States and the Global Economy531
The United States as an Open Economy532
The Advantages of Specialization and Trade534
Comparative Advantage and International Trade536
Sources of Comparative Advantage539
Why Is Free Trade Controversial?540
Arguments for Trade Restrictions549
Pursuing Trade Liberalization554
North American Free Trade Agreement554
Chapter 17International Finance565
The Balance of Payments566
The U.S. Balance of Payments569
Does the United States Borrow Too Much?570
Foreign Exchange Market572
Foreign Exchange Quotations573
Is a Strong Dollar Always Good? Is a Weak Dollar Always Bad?574
Exchange Rate Determination576
What Makes Exchange Rates Change?578
Exchange Rate Systems580
Challenges to the International Monetary System586

Read More

Customer Reviews

Average Review:

Write a Review

and post it to your social network


Most Helpful Customer Reviews

See all customer reviews >