ISBN-10:
0131907786
ISBN-13:
9780131907782
Pub. Date:
12/19/1997
Publisher:
Prentice Hall Professional Technical Reference
Price Theory and Applications / Edition 6

Price Theory and Applications / Edition 6

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Product Details

ISBN-13: 9780131907782
Publisher: Prentice Hall Professional Technical Reference
Publication date: 12/19/1997
Edition description: 6TH
Pages: 591
Product dimensions: 7.74(w) x 9.42(h) x 1.08(d)

Table of Contents

Preface xiii
PART ONE: Introduction 1(64)
Chapter 1 THE NATURE AND SCOPE OF ECONOMICS
1(24)
1.1 Economics as a Social Science
4(3)
1.2 "Economic Man"
7(6)
The Rationality Assumption
7(3)
Preferences and the Self-interest Assumption
10(3)
1.3 Interacting Through Markets--The Functions of Price
13(4)
Market and Nonmarket Interactions
13(2)
Functions of Price--The Market System
15(2)
1.4 Positive versus Normative Analysis: "Is" versus "Ought"
17(2)
1.5 Elements of the Market System
19(2)
Decision-Making Agents in the Economy
19(1)
Scarcity, Objects of Choice, and Economic Activities
19(1)
The Circular Flow
20(1)
1.6 Microeconomics and Macroeconomics
21(1)
Summary
22(1)
Questions
23(2)
Chapter 2 WORKING TOOLS
25(40)
2.1 Equilibrium: Supply-Demand Analysis
27(22)
Equilibrium of Supply and Demand
27(1)
How Changes in Supply or Demand Affect Equilibrium
28(6)
Algebra of Supply-Demand Analysis
34(3)
An Application: Introduction of a New Supply Source
37(1)
Taxes on Transactions
38(5)
*An Application: Interdiction of Supply
43(2)
Price Ceilings and Floors
45(4)
2.2 The Tools of Optimization Analysis
49(11)
Summary
60(1)
Questions
61(4)
PART TWO: Preference, Consumption, and Demand 65(94)
Chapter 3 UTILITY AND PREFERENCE
65(26)
3.1 The Laws of Preference
66(4)
3.2 Utility and Preference
70(7)
Cardinal versus Ordinal Utility?
70(5)
Utility of Commodity Baskets
75(2)
3.3 Characteristics of Indifference Curves
77(5)
3.4 Goods, Bads, and Neuters
82(4)
An Application: Charity
84(2)
3.5 The Sources and Content of Preferences
86(3)
Summary
89(1)
Questions
89(2)
Chapter 4 CONSUMPTION AND DEMAND
91(38)
4.1 The Optimum of the Consumer
92(11)
The Algebra and Geometry of Consumer Choice
92(4)
Optimum of the Consumer (Cardinal Utility)
96(3)
Optimum of the Consumer (Ordinal Utility)
99(4)
4.2 Complements and Anticomplements (Substitutes)
103(4)
4.3 The Consumer's Response to Changing Opportunities
107(10)
The Income Expansion Path and Engel Curve
107(3)
The Engel Curve (EC) and the Engel Expenditure Curve (EEC)
110(3)
Price Expansion Path and Demand Curve
113(4)
4.4 Income and Substitution Effects of a Price Change
117(3)
An Application: How Can the Giffen Case Come About? How Likely Is It?
119(1)
4.5 From Individual Demand to Market Demand
120(2)
4.6 An Application: Subsidy versus Voucher
122(2)
Summary
124(2)
Questions
126(3)
Chapter 5 APPLICATIONS AND EXTENSIONS OF DEMAND THEORY
129(30)
5.1 The Engel Curve and the Income Elasticity of Demand
130(4)
5.2 The Demand Curve and the Price Elasticity of Demand
134(5)
5.3 The Cross-Elasticity of Demand
139(1)
5.4 Fitting a Demand Curve
140(6)
Constant Slope versus Constant Elasticity
141(2)
The General Demand Function
143(3)
5.5 Determinants of Responsiveness of Demand to Price
146(2)
5.6 Multiple Constraints
148(7)
Coupon Rationing
148(1)
Point Rationing
149(6)
Summary
155(1)
Questions
156(3)
PART THREE: The Firm and the Industry 159(150)
Chapter 6 THE BUSINESS FIRM
159(34)
6.1 Why Firms? Entrepreneur, Owner, Manager
160(7)
Economic Profit versus Accounting Profit
162(1)
The Separation of Ownership and Control
163(4)
6.2 The Optimum of the Competitive Firm
167(10)
The Shutdown Decision
174(1)
An Application: Division of Output among Plants
175(2)
6.3 Cost Functions
177(8)
Short Run versus Long Run
177(5)
Rising Costs and Diminishing Returns
182(3)
6.4 An Application: Peak versus Off-Peak Operation
185(4)
Summary
189(1)
Questions
190(3)
Chapter 7 EQUILIBRIUM IN THE PRODUCT MARKET--COMPETITIVE INDUSTRY
193(32)
7.1 The Supply Function of the Industry
194(11)
From Firm Supply to Market Supply: The Short Run
194(4)
Long-Run and Short-Run Supply
198(4)
External Economies and Diseconomies
202(3)
7.2 Firm Survival and the Zero-Profit Theorem
205(2)
7.3 The Benefits of Exchange: Consumer Surplus and Producer Surplus
207(5)
An Application: The Water-Diamond Paradox
208(2)
An Application: Benefits of an Innovation
210(2)
7.4 Hindrances to Trade
212(10)
Transaction Taxes
212(2)
Supply Quotas
214(1)
(*)An Application: Import Quotas
215(1)
Price Ceilings and "Shortages"
216(6)
Summary
222(1)
Questions
223(2)
Chapter 8 MONOPOLIES AND CARTELS
225(32)
8.1 The Monopolist's Profit-Maximizing Optimum
226(11)
Price-Quantity Solution
226(4)
Monopolist versus Competitive Solutions: Comparison
230(2)
An Application: Author versus Publisher
232(4)
An Application: Monopolist with Competitive Fringe
236(1)
8.2 Monopoly and Economic Efficiency
237(2)
8.3 Regulation of Monopoly
239(5)
8.4 Monopolistic Price Discrimination
244(5)
Market Segmentation
244(2)
Multipart Pricing
246(2)
Perfect Discrimination
248(1)
8.5 Cartels
249(5)
Summary
254(1)
Questions
255(2)
Chapter 9 THE PRODUCT AS A VARIABLE
257(26)
9.1 Quality
258(11)
Quality under Competition and Monopoly
259(5)
An Application: Suppression of Inventions
264(3)
Cartels and Quality
267(1)
Quality under Imperfect Consumer Information
268(1)
9.2 Variety
269(10)
Product Variety under Monopoly
272(1)
(*)Monopolistic Competition
273(6)
Summary
279(1)
Questions
280(3)
Chapter 10 OLIGOPOLY AND STRATEGIC BEHAVIOR
283(26)
10.1 The Theory of Games
284(7)
Patterns of Payoffs
284(2)
Alternative Protocols and Solution Concepts
286(5)
10.2 Duopoly--Identical Products
291(7)
Quantity Competition
291(5)
Price Competition
296(2)
10.3 Duopoly--Nonidentical Products
298(3)
10.4 Oligopoly and Collusion
301(5)
An Application: The "Kinked" Demand Curve
302(3)
An Application: "Most-Favored Customer" Clause
305(1)
Summary
306(1)
Questions
307(2)
PART FOUR: Factor Markets and Income Distribution 309(78)
Chapter 11 DEMAND FOR FACTORS OF PRODUCTION
309(38)
11.1 Production Using a Single Variable Input
310(10)
The Production Function
310(1)
Diminishing Returns
311(2)
From Production Function to Cost Function
313(3)
The Firm's Demand for a Single Variable Input
316(4)
11.2 Production Using Several Variable Inputs
320(14)
The Production Function
320(6)
The Factor-Employment Decision
326(4)
The Firm's Demand for Inputs
330(4)
11.3 The Industry's Demand for Inputs
334(2)
11.4 Monopsony in the Factor Market
336(2)
11.5 An Application: Minimum-Wage Laws
338(6)
Summary
344(1)
Questions
345(2)
Chapter 12 RESOURCE SUPPLY AND FACTOR-MARKET EQUILIBRIUM
347(40)
12.1 The Optimum of the Resource Owner
348(10)
An Application: The Incentive Effects of "Welfare"
354(1)
An Application: The Incentive Effects of Social Security
355(3)
12.2 Resource Supply and Competitive Factor-Market Equilibrium
358(7)
From Individual Supply to Market Supply
358(2)
Demand and Supply Together
360(2)
An Application: Sources of Growing Wage Inequality
362(3)
12.3 Monopolies and Cartels in Resource Supply
365(7)
Optimum of the Monopolist Resource Owner
365(4)
Resource Cartels
369(3)
12.4 The "Functional" Distribution of Income
372(8)
The Traditional Classification: Land, Labor, and Capital
372(2)
Capital, Rate of Return, and Interest
374(3)
An Application: Investment in Human Capital
377(3)
12.5 Economic Rent
380(2)
12.6 Capital, Intertemporal Choice, and the Circular Flow
382(1)
Summary
383(2)
Questions
385(2)
PART FIVE: Exchange 387(40)
Chapter 13 EXCHANGE, TRANSACTION COSTS, AND MONEY
387(40)
13.1 Pure-Exchange Equilibrium: The Edgeworth Box
388(5)
13.2 Supply and Demand in Pure Exchange
393(8)
An Application: Market Experiments in Economics
398(3)
13.3 Exchange and Production
401(9)
13.4 Imperfect Markets: Costs of Exchange
410(9)
Proportional Transaction Costs
412(4)
(*)Lump-Sum Transaction Costs
416(3)
13.5 The Role of Money
419(5)
Money as Medium of Exchange
420(2)
Money as Temporary Store of Value
422(2)
Summary
424(1)
Questions
425(2)
PART SIX: Economics and Time 427(46)
Chapter 14 THE ECONOMICS OF TIME
427(46)
14.1 Elements of the Economics of Time
429(2)
14.2 Consumption Choices Over Time: Pure Exchange
431(6)
Borrowing-Lending Equilibrium with Zero Net Investment
431(3)
An Application: Double Taxation of Saving?
434(3)
14.3 Production and Consumption Over Time: Savings and Investment
437(5)
14.4 Investment Decisions and Project Analysis
442(12)
The Separation Theorem
442(1)
The Present-Value Rule
443(7)
The Rate of Return (ROR) as Decision Criterion
450(4)
14.5 Real versus Money Interest: Allowing for Inflation
454(4)
14.6 The Multiplicity of Interest Rates
458(5)
An Application: The Discount Rate for Project Analysis
461(2)
14.7 The Fundamentals of Investment, Saving, and Interest
463(5)
Summary
468(1)
Questions
469(4)
PART SEVEN: Political Economy 473(76)
Chapter 15 WELFARE ECONOMICS: THE MARKET AND THE STATE
473(40)
15.1 Goals of Economic Policy
474(7)
Efficiency versus Equity
474(2)
Utilitarianism
476(1)
Maximizing Consumer Surplus plus Producer Surplus
477(1)
Efficient Allocations in the Edgeworth Box
477(1)
An Application: "Envy-Free" Allocations
478(3)
15.2 The Theorem of the Invisible Hand: The Role of Prices
481(3)
Efficient Consumption
481(1)
Efficient Production
482(1)
Efficient Balance between Production and Consumption
482(2)
15.3 What Can Go Wrong? "Market Failures"
484(8)
Monopoly
484(1)
Externalities
484(6)
The Coase Theorem
490(2)
15.4 Public Goods
492(13)
Efficient Production and Consumption of Public Goods
492(3)
Voluntary Provision of Nonexcludable Public Goods
495(5)
An Application: Weakest-Link versus Best-Shot Models of Public Goods
500(5)
15.5 Appropriative Activity: "Rent Seeking"
505(4)
Summary
509(1)
Questions
510(3)
Chapter 16 GOVERNMENT, CONFLICT, AND COOPERATION
513(36)
16.1 The Other Side of the Coin: "Government Failure"
514(5)
Political Competition and Its Limits
514(3)
Political and Special Interests
517(2)
16.2 Voting as an Instrument of Control
519(7)
Majority and Minority--"Logrolling"
520(1)
The Cycling Paradox
521(1)
The Median-Voter Theorem
522(4)
16.3 Rent-Seeking Competition
526(4)
16.4 Conflict and Cooperation
530(15)
Elements of Conflict
530(8)
Conflict and Game Theory
538(5)
An Application: Should You Pay Ransom?
543(2)
Summary
545(1)
Questions
546(3)
Answers to Selected Questions 549(28)
Name Index 577(4)
Subject Index 581

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