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Part 1 The Economic Way of Thinking<br/>1 (53)<br/>The Economic Approach<br/>4 (25)<br/>What Is Economics About?<br/>5 (1)<br/>Outstanding Economist<br/>The Importance of Adam Smith, the Father of Economic Science<br/>6 (1)<br/>Economics at the Movies<br/>Ferris Bueller's Day Off (1986)<br/>6 (4)<br/>The Economic Way of Thinking<br/>10 (7)<br/>Positive and Normative Economics<br/>17 (1)<br/>Pitfalls to Avoid in Economic Thinking<br/>17 (3)<br/>Economics as a Career<br/>20 (1)<br/>Key Points<br/>20 (1)<br/>Critical Analysis Questions<br/>21 (2)<br/>Addendum<br/>Understanding Graphs<br/>23 (6)<br/>Some Tools of the Economist<br/>29 (25)<br/>What Shall We Give Up?<br/>30 (2)<br/>Trade Creates Value<br/>32 (1)<br/>Outstanding Economist<br/>Thomas Sowell<br/>32 (1)<br/>Economics at the Movies<br/>Wall Street (1987)<br/>33 (2)<br/>The Importance of Property Rights<br/>35 (1)<br/>Key to Prosperity<br/>Private Ownership<br/>35 (4)<br/>Applications in Economics<br/>Protecting Endangered Species and the Environment with Private-Property Rights<br/>39 (1)<br/>Production Possibilities Curve<br/>40 (5)<br/>Trade, Output, and Living Standards<br/>45 (1)<br/>Key to Prosperity<br/>Gains from Trade<br/>45 (2)<br/>Human Ingenuity and the Creation of Wealth<br/>47 (1)<br/>Key to Prosperity<br/>Human Ingenuity<br/>47 (1)<br/>Economic Organization<br/>48 (2)<br/>Key Points<br/>50 (1)<br/>Critical Analysis Questions<br/>51 (1)<br/>Addendum<br/>Comparative Advantage, Specialization, and Gains from Trade<br/>52 (2)<br/>Part 2 Markets and Government<br/>54 (92)<br/>Supply, Demand, and the Market Process<br/>56 (27)<br/>Consumer Choice and the Law of Demand<br/>58 (3)<br/>Changes in Demand Versus Changes in Quantity Demanded<br/>61 (4)<br/>Thumbnail Sketch<br/>Factors That Cause Changes in Demand and Quantity Demanded<br/>65 (1)<br/>Producer Choice and the Law of Supply<br/>65 (1)<br/>Key to Prosperity<br/>Profits and Losses<br/>66 (2)<br/>Outstanding Economist<br/>Alfred Marshall<br/>68 (1)<br/>Changes in Supply Versus Changes in Quantity Supplied<br/>69 (1)<br/>Thumbnail Sketch<br/>Factors That Cause Changes in Supply and Quantity Supplied<br/>69 (2)<br/>How Market Prices are Determined: Supply and Demand Interact<br/>71 (3)<br/>Economics at the Movies<br/>Pretty Woman (1990)<br/>74 (1)<br/>How Markets Respond to Changes in Demand and Supply<br/>75 (2)<br/>Thumbnail Sketch<br/>How Changes in Demand and Supply Affect Market Price and Quantity<br/>77 (1)<br/>Invisible Hand Principle<br/>78 (1)<br/>Key to Prosperity<br/>Invisible Hand Principle<br/>78 (3)<br/>Key Points<br/>81 (1)<br/>Critical Analysis Questions<br/>81 (2)<br/>Supply and Demand: Applications and Extensions<br/>83 (24)<br/>The Link between Resource and Product Markets<br/>84 (2)<br/>The Economics of Price Controls<br/>86 (1)<br/>Applications in Economics<br/>The Imposition of Price Ceilings During Hurricane Hugo<br/>87 (5)<br/>Black Markets and the Importance of the Legal Structure<br/>92 (2)<br/>The Impact of a Tax<br/>94 (5)<br/>Tax Rates, Tax Revenues, and the Laffer Curve<br/>99 (3)<br/>Applications in Economics<br/>The Laffer Curve and Mountain-Climbing Deaths<br/>102 (1)<br/>The Impact of a Subsidy<br/>102 (3)<br/>Key Points<br/>105 (1)<br/>Critical Analysis Questions<br/>105 (2)<br/>Difficult Cases for the Market, and the Role of Government<br/>107 (17)<br/>A Closer Look at Economic Efficiency<br/>108 (1)<br/>If It's Worth Doing, It's Worth Doing Imperfectly<br/>109 (1)<br/>Economics at the Movies<br/>Along Came Polly (2004)<br/>110 (1)<br/>Thinking about the Economic Role of Government<br/>110 (2)<br/>Potential Shortcomings of the Market<br/>112 (5)<br/>Applications in Economics<br/>Capturing External Benefits: The Case of Walt Disney World<br/>117 (4)<br/>Pulling Things Together<br/>121 (1)<br/>Key Points<br/>122 (1)<br/>Critical Analysis Questions<br/>122 (2)<br/>The Economics of Collective Decision Making<br/>124 (22)<br/>The Size and Growth of the U.S. Government<br/>125 (2)<br/>The Differences and Similarities between Governments and Markets<br/>127 (1)<br/>Applications in Economics<br/>Perspectives on the Cost of Political Competition: What Does It Cost to Get Elected?<br/>127 (2)<br/>Political Decision Making: An Overview<br/>129 (1)<br/>Outstanding Economist<br/>James Buchanan<br/>130 (2)<br/>When the Political Process Works Well<br/>132 (2)<br/>When the Political Process Works Poorly<br/>134 (1)<br/>Applications in Economics<br/>Sweet Subsides to Sugar Growers: A Case Study of Special-Interest Effect<br/>135 (5)<br/>Economic Organization: Who Produces: Who Pays, and Why It Matters<br/>140 (2)<br/>The Economic Way of Thinking about Government<br/>142 (1)<br/>Could Constitutional Changes Help Promote Prosperity?<br/>142 (1)<br/>Thumbnail Sketch<br/>What Weakens the Case for Market-Sector Allocation Versus Public-Sector Intervention, and Vice Versa<br/>142 (1)<br/>Key Points<br/>143 (1)<br/>Critical Analysis Questions<br/>144 (2)<br/>Part 3 Core Macroeconomics<br/>146 (220)<br/>Taking the Nation's Economic Pulse<br/>148 (21)<br/>GDP---A Measure of Output<br/>149 (1)<br/>Outstanding Economist<br/>Simon Kuznets<br/>149 (2)<br/>GDP as a Measure of Both Output and Income<br/>151 (5)<br/>Adjusting for Price Changes and Deriving Real GDP<br/>156 (4)<br/>Problems with GDP as a Measuring Rod<br/>160 <br/>Applications in Economics<br/>Converting Prior Data to Current Dollars: The Case of Gasoline<br/>159 (3)<br/>Differences in GDP Over Time<br/>162 (1)<br/>Applications in Economics<br/>The Time Cost of Goods: Today and Yesterday<br/>163 (2)<br/>The Great Contribution of GDP<br/>165 (1)<br/>Key Points<br/>165 (1)<br/>Critical Analysis Questions<br/>166 (2)<br/>Addendum<br/>The Construction of a Price Index<br/>168 (1)<br/>Economic Fluctuations, Unemployment, and Inflation<br/>169 (20)<br/>Swings in the Economic Pendulum<br/>170 (2)<br/>Measures of Economic Activity<br/>Expansions and Recessions<br/>172 (1)<br/>Economic Fluctuations and the Labor Market<br/>172 (2)<br/>Measures of Economic Activity<br/>Deriving the Unemployment Rate<br/>174 (1)<br/>Thumbnail Sketch<br/>Formulas for Key Labor Market Indicators<br/>175 (1)<br/>Three Types of Unemployment<br/>176 (1)<br/>Myths in Economics<br/>Unemployment Would Not Exist If the Economy Were Operating Efficiently<br/>177 (2)<br/>Employment Fluctuations---The Historical Record<br/>179 (1)<br/>Measures of Economic Activity<br/>Would Personal Savings Accounts Reduce the Rate of Unemployment?<br/>180 (1)<br/>Actual and Potential GDP<br/>181 (1)<br/>The Effects of Inflation<br/>182 (4)<br/>Key Points<br/>186 (1)<br/>Critical Analysis Questions<br/>186 (3)<br/>An Introduction to Basic Macroeconomic Markets<br/>189 (25)<br/>Understanding Macroeconomics: Our Game Plan<br/>190 (1)<br/>Four Key Markets: Resources, Goods and Services, Loanable Funds, and Foreign Exchange<br/>190 (3)<br/>Aggregate Demand for Goods and Services<br/>193 (2)<br/>Thumbnail Sketch<br/>Why Is the Aggregate Quantity Demanded Inversely Related to the Price Level?<br/>195 (1)<br/>Aggregate Supply of Goods and Services<br/>195 (3)<br/>Thumbnail Sketch<br/>Why Is the Short-Run Aggregate Quantity Supplied Directly Related to the Price Level?<br/>198 (1)<br/>Equilibrium in the Goods and Services Market<br/>198 (4)<br/>Resource Market<br/>202 (1)<br/>Loanable Funds Market<br/>203 (3)<br/>Foreign Exchange Market<br/>206 (1)<br/>Applications in Economics<br/>Bonds, Interest Rates, and Bond Prices<br/>207 (2)<br/>Leakages and Injections from the Circular Flow of Income<br/>209 (2)<br/>Key Points<br/>211 (1)<br/>Critical Analysis Questions<br/>212 (2)<br/>Working with Our Basic Aggregate Demand and Aggregate Supply Model<br/>214 (22)<br/>Anticipated and Unanticipated Changes<br/>215 (1)<br/>Factors That Shift Aggregate Demand<br/>215 (3)<br/>Thumbnail Sketch<br/>What Factors Affect Aggregate Demand?<br/>218 (1)<br/>Shifts in Aggregate Supply<br/>218 (3)<br/>Thumbnail Sketch<br/>What Factors Affect Long-Run and Short-Run Aggregate Supply?<br/>221 (1)<br/>Steady Economic Growth and Anticipated Changes in Long-Run Aggregate Supply<br/>221 (1)<br/>Unanticipated Changes and Market Adjustments<br/>222 (6)<br/>The Business Cycle Revisited<br/>228 (2)<br/>Does a Market Economy Have a Self-Correcting Mechanism?<br/>230 (4)<br/>Key Points<br/>234 (1)<br/>Critical Analysis Questions<br/>234 (2)<br/>Keynes and the Evolution of Macroeconomics<br/>236 (20)<br/>The Great Depression and Macroeconomics<br/>237 (1)<br/>Outstanding Economist<br/>John Maynard Keynes<br/>238 (3)<br/>Keynesian Equilibrium<br/>241 (5)<br/>The Keynesian Model Within the AD-AS Framework<br/>246 (1)<br/>The Multiplier<br/>247 (3)<br/>Applications in Economics<br/>Sports Stadiums, Development Subsidies, and the Multiplier<br/>250 (1)<br/>Keynesian View of the Business Cycle<br/>251 (1)<br/>Evolution of Modern Macroeconomics<br/>252 (2)<br/>Key Points<br/>254 (1)<br/>Critical Analysis Questions<br/>254 (2)<br/>Fiscal Policy<br/>256 (21)<br/>Budget Deficits and Surpluses<br/>257 (1)<br/>Keynesian View of Fiscal Policy<br/>258 (2)<br/>The Outstanding Economist<br/>Paul Samuelson<br/>260 (1)<br/>Fiscal Policy and the Crowding-Out Effect<br/>260 (2)<br/>New Classical View of Fiscal Policy<br/>262 (2)<br/>Fiscal Policy Changes and Problems of Timing<br/>264 (2)<br/>How Politics Hampers the Effectiveness of Fiscal Policy<br/>266 (1)<br/>Fiscal Policy as a Stabilization Tool: A Modern Synthesis<br/>267 (1)<br/>The Supply-Side Effects of Fiscal Policy<br/>268 (2)<br/>Applications in Economics<br/>Have Supply-Side Economists Found a Way to Soak the Rich?<br/>270 (2)<br/>The Fiscal Policy of the United States<br/>272 (1)<br/>Thumbnail Sketch<br/>The Impact of Expansionary Fiscal Policy---A Summary of Four Views<br/>272 (3)<br/>Key Points<br/>275 (1)<br/>Critical Analysis Questions<br/>275 (2)<br/>Money and the Banking System<br/>277 (25)<br/>What Is Money?<br/>278 (1)<br/>How the Supply of Money Affects Its Value<br/>279 (1)<br/>How Is the Money Supply Measured?<br/>280 (2)<br/>The Business of Banking<br/>282 (3)<br/>Economics at the Movies<br/>It's a Wonderful Life (1946)<br/>285 (1)<br/>How Banks Create Money by Extending Loans<br/>285 (2)<br/>The Federal Reserve System<br/>287 (2)<br/>Outstanding Economist<br/>Alan Greenspan<br/>289 (5)<br/>Thumbnail Sketch<br/>What Are the Differences between the U.S. Treasury and the Federal Reserve Banking System?<br/>294 (1)<br/>Ambiguities in the Meaning and Measurement of the Money Supply<br/>295 (2)<br/>Applications in Economics<br/>Will Money Be Electronic in the Future?<br/>297 (1)<br/>The Changing Nature of Money around the World<br/>297 (2)<br/>Key Points<br/>299 (1)<br/>Critical Analysis Questions<br/>299 (3)<br/>Modern Macroeconomics and Monetary Policy<br/>302 (25)<br/>The Impact of Monetary Policy on Output and Inflation<br/>303 (1)<br/>Outstanding Economist<br/>Milton Friedman<br/>304 (4)<br/>Thumbnail Sketch<br/>The Transmission of Monetary Policy---A Summary<br/>308 (3)<br/>Monetary Policy in the Long Run<br/>311 (4)<br/>Monetary Policy When the Effects Are Anticipated<br/>315 (1)<br/>Interest Rates and Monetary Policy<br/>315 (3)<br/>Effects of Monetary Policy---A Summary<br/>318 (1)<br/>Thumbnail Sketch<br/>What Are the Effects of Monetary Policy?<br/>318 (1)<br/>Testing the Major Implications of Monetary Theory<br/>319 (5)<br/>Key Points<br/>324 (1)<br/>Critical Analysis Questions<br/>325 (2)<br/>Stabilization Policy, Output, and Employment<br/>327 (19)<br/>Economic Fluctuations---The Historical Record<br/>328 (1)<br/>Can Discretionary Policy Promote Economic Stability?<br/>329 (2)<br/>Measures of Economic Activity<br/>Index of Leading Indicators<br/>331 (1)<br/>How Are Expectations Formed?<br/>332 (2)<br/>Outstanding Economist<br/>Robert Lucas<br/>334 (1)<br/>Macro Policy Implications of Adaptive and Rational Expectations<br/>334 (2)<br/>The Phillips Curve: The View of the 1960s Versus Today<br/>336 (4)<br/>Applications in Economics<br/>Perverse Macroeconomic Policy and the Great Depression<br/>340 (1)<br/>Economics at the Movies<br/>Seabiscuit (2003)<br/>341 (1)<br/>The Modern Consensus View of Stabilization Policy<br/>342 (1)<br/>Key to Prosperity<br/>Price Stability<br/>342 (2)<br/>Key Points<br/>344 (1)<br/>Critical Analysis Questions<br/>344 (2)<br/>Economic Growth and the Wealth of Nations<br/>346 (20)<br/>Importance of Economic Growth<br/>347 (2)<br/>Best and Worst Growth Records<br/>349 (1)<br/>What Determines Whether a Country Will Grow or Stagnate?<br/>350 (1)<br/>Applications in Economics<br/>China: Is It a Special Case?<br/>351 (3)<br/>Outstanding Economist<br/>Douglass C. North<br/>354 (1)<br/>What Institutions and Policies Will Promote Growth?<br/>354 (1)<br/>Thumbnail Sketch<br/>Sources of Economic Growth<br/>355 (2)<br/>Role of Government and Economic Progress<br/>357 (1)<br/>Key to Prosperity<br/>Government and the Environment for Prosperity<br/>357 (4)<br/>Economic Freedom and Growth<br/>361 (3)<br/>Key Points<br/>364 (1)<br/>Critical Analysis Questions<br/>364 (2)<br/>Part 4 International Economics<br/>366 (51)<br/>Gaining from International Trade<br/>369 (24)<br/>The Trade Sector of the United States<br/>370 (1)<br/>Gains from Specialization and Trade<br/>371 (1)<br/>Economics at the Movies<br/>Cast Away (2000)<br/>372 (4)<br/>Key to Prosperity<br/>International Trade<br/>376 (1)<br/>Supply, Demand, and International Trade<br/>377 (2)<br/>The Economics of Trade Restrictions<br/>379 (3)<br/>Why Do Nations Adopt Trade Restrictions?<br/>382 (1)<br/>Applications in Economics<br/>Do More Open Economies Perform Better?<br/>383 (2)<br/>Trade Barriers and Popular Trade Fallacies<br/>385 (2)<br/>The Changing Nature of Global Trade<br/>387 (2)<br/>Key Points<br/>389 (1)<br/>Critical Analysis Questions<br/>390 (3)<br/>International Finance and the Foreign Exchange Market<br/>393 (24)<br/>The Foreign Exchange Market<br/>394 (2)<br/>Determinants of the Exchange Rate<br/>396 (1)<br/>Why Do Exchange Rates Change?<br/>397 (4)<br/>Thumbnail Sketch<br/>What Factors Cause a Nation's Currency to Appreciate or Depreciate?<br/>401 (1)<br/>International Finance and Alternative Exchange Rate Regimes<br/>401 (2)<br/>Balance of Payments<br/>403 (5)<br/>Myths in Economics<br/>408 (1)<br/>Are Trade Deficits Bad and Trade Surpluses Good?<br/>408 (2)<br/>Key Points<br/>410 (1)<br/>Critical Analysis Questions<br/>411 (2)<br/>Addendum<br/>Selected Economic Indicators: An International Comparison<br/>413 (4)<br/>Part 5 Core Microeconomics<br/>417 (184)<br/>Consumer Choice and Elasticity<br/>420 (22)<br/>The Fundamentals of Consumer Choice<br/>421 (1)<br/>Marginal Utility, Consumer Choice, and the Demand Curve of an Individual<br/>422 (4)<br/>Market Demand Reflects the Demand of Individual Consumers<br/>426 (1)<br/>Elasticity of Demand<br/>426 (6)<br/>How Demand Elasticity and Price Changes Affect Total Expenditures (or Revenues) on a Product<br/>432 (1)<br/>Income Elasticity<br/>433 (1)<br/>Price Elasticity of Supply<br/>434 (1)<br/>Key Points<br/>435 (1)<br/>Critical Analysis Questions<br/>435 (1)<br/>Addendum<br/>Consumer Choice and Indifference Curves<br/>436 (6)<br/>Costs and the Supply of Goods<br/>442 (25)<br/>The Organization of the Business Firm<br/>443 (3)<br/>Costs, Competition, and the Corporation<br/>446 (2)<br/>Applications in Economics<br/>Cooking the Books: How the Market Responds to Criminal Behavior<br/>448 (1)<br/>The Economic Role of Costs<br/>449 (1)<br/>Short-Run and Long-Run Time Periods<br/>450 (1)<br/>Applications in Economics<br/>Economic and Accounting Costs: A Hypothetical Example<br/>451 (1)<br/>Categories of Costs<br/>451 (1)<br/>Output and Costs in the Short Run<br/>452 (1)<br/>Thumbnail Sketch<br/>Compact Glossary on Cost<br/>453 (4)<br/>Output and Cost in the Long Run<br/>457 (4)<br/>What Factors Cause Cost Curves to Shift?<br/>461 (1)<br/>The Economic Way of Thinking about Costs<br/>462 (2)<br/>Myths of Economics<br/>A Good Business Decision Maker Will Never Sell a Product for Less than Its Production Costs<br/>464 (1)<br/>Key Points<br/>465 (1)<br/>Critical Analysis Questions<br/>465 (2)<br/>Price Takers and the Competitive Process<br/>467 (21)<br/>Price Takers and Price Searchers<br/>468 (1)<br/>Applications in Economics<br/>The Aalsmeer Flower Auction: An Illustration of a Competitive Market<br/>468 (1)<br/>What Are the Characteristics of Price-Taker Markets?<br/>469 (1)<br/>How Does the Price Taker Maximize Profit?<br/>470 (2)<br/>Applications in Economics<br/>Experimental Economics: The Significance of Competition<br/>472 (3)<br/>The Firm's Short-Run Supply Curve<br/>475 (1)<br/>The Short-Run Market Supply Curve<br/>476 (1)<br/>Price and Output in Price-Taker Markets<br/>476 (4)<br/>Applications in Economics<br/>Coffee Production In a Price Takers' Market<br/>480 (2)<br/>The Role of Profits and Losses<br/>482 (1)<br/>Competition Promotes Prosperity<br/>483 (1)<br/>Key to Prosperity<br/>Competition<br/>483 (1)<br/>Outstanding Economist<br/>Friedrich A. von Hayek<br/>484 (1)<br/>Key Points<br/>485 (1)<br/>Critical Analysis Questions<br/>485 (3)<br/>Price-Searcher Markets with Low Entry Barriers<br/>488 (19)<br/>Competitive Price-Searcher Markets<br/>488 (4)<br/>Economics at the Movies<br/>You've Got Mail (1998)<br/>492 (1)<br/>Dynamic Competition, Innovation, and Business Failures<br/>493 (1)<br/>Contestable Markets and the Competitive Process<br/>493 (2)<br/>Complex Decision Making and the Entrepreneur<br/>495 (1)<br/>Applications in Economics<br/>Entrepreneurs at the Helm of Some Bizarre Occupations<br/>496 (1)<br/>Applications in Economics<br/>Five Entrepreneurs Who Have Changed Our Lives<br/>497 (2)<br/>Entrepreneurship and Economic Progress<br/>499 (1)<br/>Key to Prosperity<br/>Entrepreneurship<br/>499 (1)<br/>Evaluating Competitive Price-Searcher Markets<br/>500 (2)<br/>A Special Case: Price Discrimination<br/>502 (2)<br/>Key Points<br/>504 (1)<br/>Critical Analysis Questions<br/>505 (2)<br/>Price-Searcher Markets with High Entry Barriers<br/>507 (23)<br/>Why Are Entry Barriers Sometimes High?<br/>508 (1)<br/>The Characteristics of a Monopoly<br/>509 (4)<br/>The Characteristics of an Oligopoly<br/>513 (1)<br/>Price and Output under Oligopoly<br/>514 (4)<br/>Market Power and Profit---The Early Bird Catches the Worm<br/>518 (1)<br/>Applications in Economics<br/>Oligopolistic Decision Making, Game Theory, and the Prisoner's Dilemma<br/>519 (1)<br/>Defects of Markets with High Entry Barriers<br/>520 (1)<br/>Economics at the movies<br/>A Beautiful Mind (2001)<br/>520 (1)<br/>Policy Alternatives When Entry Barriers Are High<br/>521 (5)<br/>The Competitive Process in the Real World<br/>526 (1)<br/>Key Points<br/>527 (1)<br/>Critical Analysis Questions<br/>528 (2)<br/>The Supply of and Demand for Productive Resources<br/>530 (20)<br/>Human and Nonhuman Resources<br/>531 (2)<br/>Outstanding Economist<br/>Gary Becker<br/>533 (1)<br/>The Demand for Resources<br/>533 (4)<br/>Marginal Productivity and the Firm's Hiring Decision<br/>537 (4)<br/>The Supply of Resources<br/>541 (3)<br/>Supply, Demand, and Resource Prices<br/>544 (2)<br/>The Coordinating Function of Resource Prices<br/>546 (1)<br/>Key Points<br/>547 (1)<br/>Critical Analysis Questions<br/>548 (2)<br/>Earnings, Productivity, and the Job Market<br/>550 (16)<br/>Why Do Earnings Differ?<br/>551 (2)<br/>Applications in Economics<br/>A College Degree as a Job Market Signal: Why You Should Take More Math<br/>553 (3)<br/>Thumbnail Sketch<br/>What Are the Sources of Earnings Differentials?<br/>556 (1)<br/>Applications in Economics<br/>America's Millionaires<br/>557 (1)<br/>The Economics of Employment Discrimination<br/>557 (3)<br/>The Link between Productivity and Earnings<br/>560 (1)<br/>Key to Economic Progress<br/>Link between Productivity and Earnings<br/>560 (2)<br/>Myths of Economics<br/>Automation Is the Major Cause of Unemployment<br/>562 (1)<br/>Applications in Economics<br/>Are Lifetime Jobs Disappering?<br/>563 (1)<br/>Key Points<br/>564 (1)<br/>Critical Analysis Questions<br/>564 (2)<br/>Investment, the Capital Market, and the Wealth of Nations<br/>566 (18)<br/>Why People Invest<br/>567 (1)<br/>Economics at the Movies<br/>A Knight's Tale (2001)<br/>568 (1)<br/>Interest Rates<br/>568 (3)<br/>The Present Value of Future Income and Costs<br/>571 (2)<br/>Present Value, Profitability, and Investment<br/>573 (1)<br/>Applications in Economics<br/>Would You Like to Become a Millionaire?<br/>574 (1)<br/>Investing in Human Capital<br/>575 (1)<br/>Uncertainty, Entrepreneurship, and Profit<br/>576 (1)<br/>Outstanding Economist<br/>Joseph Schumpeter<br/>577 (2)<br/>The Capital Market and the Wealth of Nations<br/>579 (1)<br/>Key to Economic Progress<br/>Innovation and the Capital Market<br/>579 (2)<br/>Key Points<br/>581 (1)<br/>Critical Analysis Questions<br/>582 (2)<br/>Income Inequality and Poverty<br/>584 (17)<br/>How Much Income Inequality Exists in the United States?<br/>585 (4)<br/>Income Mobility and Inequality in Economic Status<br/>589 (2)<br/>Poverty in the United States<br/>591 (1)<br/>Measures of Economic Activity<br/>How Is the Poverty Rate Calculated?<br/>592 (3)<br/>Applications in Economics<br/>Competition for Transfers and the Net Gain of Recipients<br/>595 (1)<br/>Income Inequality: Some Concluding Thoughts<br/>596 (2)<br/>Key Points<br/>598 (1)<br/>Critical Analysis Questions<br/>598 (3)<br/>Part 6 Applying the Basics: Special Topics<br/>601 (138)<br/>Government Spending and Taxation<br/>604 (11)<br/>Government Expenditures<br/>605 (2)<br/>Taxes and the Finance of Government<br/>607 (1)<br/>Taxes and the Cost of Government<br/>608 (4)<br/>Size of Government: The U.S. Versus Other Countries<br/>612 (1)<br/>Key Points<br/>613 (1)<br/>Critical Analysis Questions<br/>614 (1)<br/>The Internet: How Is It Changing the Economy?<br/>615 (8)<br/>Use of the Internet<br/>616 (1)<br/>Economic Gains from the Internet<br/>616 (2)<br/>Key Sectors of Internet Growth<br/>618 (1)<br/>More Efficient Consumer Markets<br/>619 (1)<br/>More Efficient Input Markets and Production Process<br/>620 (1)<br/>Labor Markets and the Internet: Faster and Better Employee-Employer watches<br/>620 (1)<br/>Concluding Thought<br/>621 (1)<br/>Key Points<br/>622 (1)<br/>Critical Analysis Questions<br/>622 (1)<br/>The Economics of Social Security<br/>623 (11)<br/>Why Is Social Security Headed for Problems?<br/>625 (1)<br/>Will the Trust Fund Lighten the Future Tax Burden?<br/>626 (1)<br/>The Real Problem of the Current System<br/>627 (1)<br/>Who Is Helped and Who Is Hurt by Social Security?<br/>628 (2)<br/>Personal Retirement Accounts and Social Security Reform<br/>630 (2)<br/>Key Points<br/>632 (1)<br/>Critical Analysis Questions<br/>633 (1)<br/>The Stock Market: Its Function, Performance, and Potential as an Investment Opportunity<br/>634 (10)<br/>The Economic Functions of the Stock Market<br/>635 (1)<br/>Stock Market Performance: The Historical Record<br/>636 (1)<br/>The Interest Rate, the Value of Future Income, and Stock Prices<br/>637 (1)<br/>The Random Walk Theory of the Stock Market<br/>638 (1)<br/>How the Ordinary Investor Can Beat the Experts<br/>639 (3)<br/>Key Points<br/>642 (1)<br/>Critical Analysis Questions<br/>643 (1)<br/>The Federal Budget and the National Debt<br/>644 (10)<br/>Deficits, Surpluses, and the National Debt<br/>645 (1)<br/>Who Owns the National Debt?<br/>645 (2)<br/>How Does Debt, Financing Influence Future Generations?<br/>647 (3)<br/>Government Debt: A Cross-Country Comparison<br/>650 (1)<br/>Social Security, Budget Deficits, and National Debt<br/>651 (1)<br/>The Political Economy, Demographics, and Debt Financing<br/>651 (1)<br/>Demographic Changes and Budget Deficits<br/>652 (1)<br/>Key Points<br/>652 (1)<br/>Critical Analysis Questions<br/>653 (1)<br/>Labor Market Policies and Unemployment: A Cross-Country Analysis<br/>654 (11)<br/>Cross-Country Variations in Unemployment Rates<br/>655 (1)<br/>The Structure of Labor Markets<br/>656 (7)<br/>Key Points<br/>663 (1)<br/>Critical Analysis Questions<br/>664 (1)<br/>Institutions, Policies, and the Irish Miracle<br/>665 (8)<br/>Ireland's U-Turn<br/>666 (2)<br/>The Impact of the Policy U-Turn<br/>668 (3)<br/>Key Points<br/>671 (1)<br/>Critical Analysis Questions<br/>671 (2)<br/>The Economics of Health Care<br/>673 (10)<br/>The Structure of the Health-Care Industry<br/>674 (2)<br/>Third-Party Payments and Health-Care Inflation<br/>676 (2)<br/>Is the U.S. Headed for a Health-Care Crisis?<br/>678 (1)<br/>Applications in Economics<br/>Could Imports from Canada Reduce the Drug Prices of Americans?<br/>679 (1)<br/>Averting the Crisis: How to Move Toward a Consumer-Driven System<br/>679 (3)<br/>Key Points<br/>682 (1)<br/>Critical Analysis Questions<br/>682 (1)<br/>School Choice: Can It Improve the Quality of Education in America?<br/>683 (8)<br/>Educational Spending and Student Performance<br/>684 (1)<br/>Economics and the Structure of the Educational System<br/>685 (2)<br/>Alternative Ways of Increasing Competition and Expanding the Options of Consumers<br/>687 (2)<br/>The Impact of Structural Change<br/>689 (1)<br/>Conclusion<br/>690 (1)<br/>Key Points<br/>690 (1)<br/>Critical Analysis Questions<br/>690 (1)<br/>Is Discrimination Responsible for the Earnings Difference between Men and Women?<br/>691 (6)<br/>Employment Discrimination and the Earnings of Women<br/>692 (1)<br/>Marital Status and the Earnings of Women<br/>693 (1)<br/>The Changing Career Objectives of Women<br/>693 (3)<br/>Implications for the Future<br/>696 (1)<br/>Key Points<br/>696 (1)<br/>Critical Analysis Questions<br/>696 (1)<br/>Do Labor Unions Increase the Wages of Workers?<br/>697 (11)<br/>Union Membership as a Share of the Workforce<br/>698 (2)<br/>How Do Unions Influence Wages?<br/>700 (3)<br/>What Gives a Union Strength?<br/>703 (2)<br/>The Wages of Union and Nonunion Employees<br/>705 (1)<br/>The Impact of Unions on the Wages of All Workers<br/>706 (1)<br/>Key Points<br/>707 (1)<br/>Critical Analysis Questions<br/>707 (1)<br/>How Does Government Regulation Affect Your Life?<br/>708 (11)<br/>Regulation of Business<br/>709 (1)<br/>The Political Economy of Regulation<br/>710 (2)<br/>Applications in Economics<br/>Limousines and Restraints on Entry<br/>712 (1)<br/>The Costs of Regulation<br/>713 (1)<br/>Applications in Economics<br/>Superfund: a Highly Inefficient Cleanup Program<br/>714 (3)<br/>Future Directions for Regulatory Policy<br/>717 (1)<br/>Key Points<br/>718 (1)<br/>Critical Analysis Questions<br/>718 (1)<br/>Resource Management: How Property Rights and Markets Replace Conflict with Cooperation<br/>719 (10)<br/>Property Rights: The Key to Environmental Quality<br/>720 (4)<br/>Applications in Economics<br/>Looking Ahead at the Flying D Ranch<br/>724 (1)<br/>How Property Rights Affect Environmental Quality and Life Expectancy<br/>724 (1)<br/>Markets, Economizing, and Resource Conservation<br/>724 (2)<br/>Applications in Economics<br/>Managing Forests for Nature, Too<br/>726 (2)<br/>Key Points<br/>728 (1)<br/>Critical Analysis Questions<br/>728 (1)<br/>Difficult Environmental Cases and the Role of Government<br/>729 (10)<br/>Government Regulation and the Environment<br/>730 (1)<br/>Climate Change and the Uncertainty Problem<br/>730 (2)<br/>Market-like Schemes: Reducing the Cost of Specific Regulations<br/>732 (1)<br/>Applications in Economics<br/>Fighting the Risks of Global Warming: Mitigation or Adaptation?<br/>733 (1)<br/>Property Rights as a Tool for Government Policy<br/>734 (1)<br/>Weakening Property Rights: The Endangered Species Act<br/>735 (2)<br/>Government Ownership of Resources and Provision of Services<br/>737 (1)<br/>Conclusion<br/>738 (1)<br/>Key Points<br/>738 (1)<br/>Critical Analysis Questions<br/>738 (1)<br/>Appendix A General Business and Economic Indicators for the United States 739 (8)<br/>Appendix B Answers to Selected Critical Analysis Questions 747 (25)<br/>Glossary 772 (11)<br/>Index 783 |
