这是一部激发学生通过真实商务案例学习微观经济学的经典著作。本书紧紧把握时代脉搏，立足于现实的商业世界和经济政策，引导学生的兴趣，培养学生的经济学直觉和理解力。作者强调经济学原理在当前经济事件中的应用，所选的实例更注重商业现实，同时以适宜的难度详细介绍了所有核心概念。全书以非常清晰的主题结构，从各个方面阐述了经济学的原理。书中的开篇案例、解决问题、建立联系、案例透视等专栏，可以使经济学这门课程的学习变得更轻松有趣。
哈伯德和奥布赖恩合著的《经济学》，以贴近实际的方式和全球化的视野带你进入经济学的世界。哈伯德多年在商学院任教，熟知案例教学法，能更直接地感受到经济全球化。本书每章开篇从一个案例开始，讲解经济学的基本原理；所提供的实例，广泛取材于当今世界各国的经济现实。这的确是一本有趣和有用的经济学入门教科书。
—— 钱颖一 清华大学经济管理学院院长、美国加州大学伯克利分校经济系教授
格伦·哈伯德是明星学者和经济学理论实践者，安东尼 P. 奥布赖恩是明星教师，他们两人合作写了一本明星教科书。这本书从实例出发，深入浅出地介绍了经济学的基本理论，并演示了这些理论用于分析实际问题的巨大效力。这是一本不可多得的以企业视角为特点的优秀启蒙经济学教科书。
—— 白重恩 清华大学经济管理学院经济系系主任、弗里曼讲席教授
哈伯德教授和奥布赖恩教授合著的《经济学》，通过紧扣时代脉搏的经济社会现象和实际案例阐述经济学原理，利于增强学习的兴趣、培养经济学直觉以及对周围经济世界的理解。这种案例教学式的做法，成就了这本让第一次学习经济学的人就易于接受并乐于阅读的经济学教科书。
—— 舒元 中山大学岭南学院院长、教授
在经济学科愈来愈偏向形式化的演化进程中，人们欣喜地看到，仍然有一些经济学家保持着一份清醒的思维，没有忘记经济学本质上是一门负有经世济民责任的社会科学，同时努力地将对经济学这一学科的本质认识融入教科书，明白无误地在课堂上教给学生。格伦·哈伯德教授和安东尼 P. 奥布赖恩教授所撰写的这部“情境式学习”的经济学教科书，对经济学的经世济民的学科本质做出了精彩的阐述!
—— 史晋川 浙江大学经济学院教授
经济学是一门将我们身边日益丰富多彩的经济现象用严谨的逻辑框架和先进的数据处理技术进行分析的社会科学。本教材以尽可能简练的经济理论模型为基础，使用大量的案例展开分析，在理论性和实践性的结合上十分有效。经济学分析经常需要在静态视角和动态视角之间进行转换，书中动态AD-AS模型的推导比较好地处理了这种转换，具有自己鲜明的特色。
—— 袁志刚 复旦大学经济学院院长、教授
在本书的新版中，我们的写作方法仍然像10多年前出版第1版时一样：为学生和教师提供一本用真实世界中的商务与政策事例解释完整的经济学理念的经济学教科书。我们的目标是在讲授经济学时，以“自由插件的方式”使用来自真实世界中的商务与政策事例。我们非常感谢使用前4版的学生和教师给出的热切反馈，使得该书成为世界上最畅销的经济学教科书之一。上一版书出版后，世界发生了很多变化，我们需要将这些新出现的真实世界的事例包括在本版书中。
本版新增内容
第5章新增了“二氧化硫总量控制与交易制度的终结”等内容，这有助于我们强化经济分析与政府政策形成之间相互影响的讨论。
第7章是第4版引入的新内容，受到了教师和学生的欢迎。在本版书中进行了改写，我们增加了几个新的需求供给图形。我们的目的是使得内容更有分析味道，也使得作为需求供给分析应用的事例更加贴切。我们也扩展了关于奥巴马总统签署的《患者保护与平价医疗法案》的讨论。
第8章新增图8-2。
第9章新增图9-1和图9-3。
第10章提供了大量行为经济学的内容。我们发现,许多学生对于微观经济学，包括这些材料很感兴趣。我们将约翰逊担任彭尼百货CEO时所遇到的问题加入“购物的行为经济学”中。本章包含了几个行为经济学研究消费者选择的讨论。
第18章增加了新的“建立联系”专栏，总结了最近关于“美国收入不平等加剧”的争论。
另外，所有章节的开篇案例和部分章后的练习题进行了更新。
学习基础：情境式学习和新颖的组织结构
我们认为,一门课如果能让学生将他们的所学应用于个人生活和他们未来的职业,培养起他们理解所读媒体内容的分析能力，那么这门课就是成功的。这就是我们在开篇案例、图表、“建立联系”专栏、“案例透视”专栏和章后问题中大量采用许多真实世界的案例来解释经济学概念的原因。这种方法有助于将商科专业和人文社科专业学生培养成为有教养的消费者、投票人和公民。此外，我们的“自由插件的方式”、我们具有现代意义的章节结构安排和在书中尽早引入政策话题都是为了激发学生的学习兴趣。
我们认为，讲授经济学原理最好是用学生们熟悉的话题。当学生们开办艺术工作室、做社会工作、在华尔街从事证券买卖、在政府部门工作或者经营一个酒吧时，学生们会从明白他们所从事工作背后的经济力量原理中获益。学商科的学生有机会在其他课程中学到许多经济原理，但是学人文的学生则不一定。因此，我们使用许多来自真实商业世界和政策的事例来解释经济概念，目的是培养受过教育的消费者、投票人和公民。
1. 有冲击力的引导章节
引导章节会为学生提供打好基础的基本知识，我们强调了边际分析和经济效率这些关键概念。在第4章中，我们使用消费者剩余和生产者剩余的概念来讨论最高限价与最低限价的经济影响，并联系了财产租赁和最低工资等熟悉的事例。我们在后面的章节再次讨论了生产者剩余和消费者剩余：第9章中的外包和影响贸易的政府政策，第15章中市场势力对经济效率的影响，第16章中企业定价政策对经济效率的影响。此外，在第8章中，我们为学生提供了最基本的理解企业如何组织、筹集资金或向消费者提供信息的分析框架。我们也解释了市场体制中，企业如何有效组织生产并满足消费者需要。
2. 及早引入政策话题
为了让学生们尽早接触到政府政策的话题，我们在第1章中讨论了卫生医疗政策，在第4章中讨论了租金控制和最低工资，在第5章中讨论了空气污染、全球变暖和公共物品的问题，在第6章中讨论了政府对毒品的政策问题，在第7章中讨论了医疗卫生政策。
3. 介绍了垄断竞争的全方位内容
我们在第13章中讨论了垄断竞争问题。尽管许多教师对垄断竞争简要讲授甚至完全略过不讲，但我们认为这是一个十分重要且易被忽略的工具，学生们根据更加熟悉的环境来强化认识市场如何作用，因为相较于完全竞争市场，学生们对在垄断竞争市场中讨论农产品事例更熟悉。我们使用垄断竞争模型引入向下倾斜的需求曲线，这通常是在“垄断”一章才引入。这种处理方法，有助于学生们抓住对几乎所有企业（并非仅仅是垄断企业）都重要的一点—向下倾斜的需求曲线。在完全竞争之后介绍垄断竞争也使得我们可以尽早讨论品牌管理和竞争成功的决定因素等话题。尽管如此，我们认为，如果教师喜欢在完全竞争之后就马上介绍完全垄断，也可以忽略该章，并不影响内容的连续性。
4. 丰富真实的博弈理论
在第14章中，我们使用博弈论来分析寡头垄断企业之间的竞争。博弈论可以帮助学生理解具有市场势力的企业在竞争性状况下怎样做出战略决策。我们在博弈论应用中使用了大家所熟知的公司，如苹果、惠普、可口可乐、百事可乐和戴尔等。
5. 独特的定价策略内容
在第16章中，我们探讨了企业怎样使用定价策略来提高利润水平。学生们随处会遇到定价策略，如购买电影票、春假订飞机票以及在线书架的比较等。我们使用与他们密切相关且熟悉的事例来说明公司怎样使用差别定价、成本加成定价和二步定价的策略。
本书特色：用来自真实世界实用的方法学习经济学
1. 开篇案例和对媒体文章的深度透视
每章的“开篇案例”都为学习提供一个贴近现实的情境，激发学生对经济学的兴趣，同时也有助于统一每章的主题。这些案例都会介绍一些大公司面对的真实情境。在每章的文字叙述、图表和教学专题栏目中都会用到这些公司的材料。许多开篇案例会集中于企业家在开发新产品以及产品推向市场中所发挥的作用，例如，第2章是特斯拉的埃隆
经济学
哈伯德和奥布赖恩合著的《经济学》，以贴近实际的方式和全球化的视野带你进入经济学的世界。哈伯德多年在商学院任教，熟知案例教学法，更直接地感受到经济全球化。本书每章开篇从一个案例开始，讲解经济学的基本原理；所提供的实例，广泛取材于当今世界各国的经济现实。这的确是一本有趣和有用的经济学入门教科书。
——钱颖一 清华大学经济管理学院院长、美国加州大学伯克利分校经济系教授
? 格伦?哈伯德是明星学者和经济学理论实践者，安东尼?奥布赖恩是明星教师，他们两人合作写了一本明星教科书。这本书从实例出发，深入浅出地介绍了经济学的基本理论，并演示了这些理论用于分析实际问题的巨大效力。这是一本不可多得的以企业视角为特点的优秀启蒙经济学教科书。
——白重恩 清华大学经济管理学院经济系主任、Freeman经济学讲席教授
? 无论对于学生还是对于经济学专业人士来说，本书都是一本非常棒的教科书。书中富有大量的实际应用及政策问题，与其他现有教材相比，作者还提出了自己的不同观点。
——邹恒甫 北京大学董辅经济学讲座教授、世界银行研究部资深研究员
武汉大学高级研究中心主任
? 哈伯德教授和奥布赖恩教授合著的《经济学》，通过紧扣时代脉搏的经济社会现象和实际案例阐述经济学原理，利于增强学习的兴趣、培养经济学直觉以及对周围经济世界的理解。这种案例教学式的做法，成就了这本让第一次学习经济学的人就易于接受并乐于阅读的经济学教科书。
——舒元 中山大学岭南学院院长、教授
? 在经济学科愈来愈偏向形式化的演化进程中，人们欣喜地看到，仍然有一些经济学家保持着一份清醒的思维，没有忘记经济学本质上是一门负有经世济民责任的社会科学，同时努力地将对经济学这一学科的本质认识融入教科书，明白无误地在课堂上教给学生。格伦?哈伯德教授和安东尼?奥布赖恩教授所撰写的这部“情境式学习”的经济学教科书，对经济学的经世济民的学科本质做出了精彩的阐述!
——史晋川 浙江大学经济学院教授
? 经济学是一门将我们身边日益丰富多彩的经济现象用严谨的逻辑框架和先进的数据处理技术进行分析的社会科学。本教材以尽可能简练的经济理论模型为基础，使用大量的案例展开分析，在理论性和实践性的结合上十分有效。经济学分析经常需要在静态视角和动态视角之间进行转换，书中动态AD-AS模型的推导比较好地处理了这种转换，具有自己鲜明的特色。
——袁志刚 复旦大学经济学院院长、教授
R. 格伦·哈伯德（R. Glenn Hubbard） 安东尼 P. 奥布赖恩（Anthony P. O’Brien） 著：暂无简介
出版说明
导 读
作者简介
前 言
术 语 表
第一部分 导论
第1章 经济学：基础与模型 2
1.1 三个重要的经济学理念 4
1.2 每个经济社会都必须解决的经济问题 8
1.3 经济模型 11
1.4 微观经济学和宏观经济学 15
1.5 重要经济学术语预览 16
本章小结 17
案例透视 看着你的智能手机 18
第2章 权衡、比较优势和市场制度 36
2.1 生产可能性边界和机会成本 38
2.2 比较优势和贸易 43
2.3 市场制度 50
本章小结 59
案例透视 哪些能入梅赛德斯–奔驰的法眼 60
第3章 价格来源：需求和供给的相互作用 68
3.1 市场的需求层面 70
3.2 市场的供给层面 78
3.3 市场均衡：供给与需求共同作用 82
3.4 需求供给变动对均衡的影响 85
本章小结 91
案例透视 谷歌和苹果也受到智能手机市场供给和需求问题的困扰 92
第4章 经济效率、政府限价和税收 100
4.1 消费者剩余与生产者剩余 102
4.2 竞争性市场的效率 106
4.3 政府干预市场：最低限价与最高限价 109
4.4 税收的经济影响 116
本章小结 121
案例透视 分享经济会增进效率吗 122
第二部分 市场行为：策略与应用
第5章 外部性、环境政策和公共产品 136
5.1 外部性和经济效率 138
5.2 外部性的私人解决方案：科斯定理 141
5.3 解决外部性的政府政策 147
5.4 四种产品分类 154
本章小结 161
第6章 弹性：供给和需求的反应 170
6.1 需求价格弹性及其度量 172
6.2 需求价格弹性大小的决定因素 178
6.3 需求价格弹性与总收益之间的关系 181
6.4 其他需求弹性 185
6.5 运用弹性理论来分析为什么家庭农场日渐减少 187
6.6 供给价格弹性及其计算 189
本章小结 194
第7章 医疗保健经济学 204
7.1 美国医疗保健事业的发展 206
7.2 世界范围内的医疗保健状况 208
7.3 医疗保健市场的外部性与信息不对称问题 213
7.4 美国关于医疗保健政策的争论 220
本章小结 229
第三部分 国内和国际经济环境中的企业
第8章 企业、股票市场和公司治理 236
8.1 企业类型 238
8.2 公司结构和委托代理问题 241
8.3 企业如何筹集资金 242
8.4 使用财务报表来评估公司 249
8.5 公司治理政策和2007～2009年的金融危机 251
本章小结 255
第9章 比较优势和国际贸易得益 270
9.1 国际经济中的美国 272
9.2 国际贸易中的比较优势 275
9.3 国家如何从国际贸易中获益 277
9.4 限制国际贸易的政府政策 283
9.5 对贸易政策和全球化的争论 290
本章小结 295
第四部分 微观基础：消费者和厂商
第10章 消费者选择和行为经济学 304
10.1 效用和消费者决策 306
10.2 推导需求曲线 314
10.3 社会因素对决策的影响 317
10.4 行为经济学：人们都选择理性吗 323
本章小结 328
第11章 技术、生产和成本 350
11.1 技术：经济学上的定义 352
11.2 经济学中的短期与长期 353
11.3 劳动的边际成本和平均成本 357
11.4 短期产量和短期成本的关系 361
11.5 画出成本曲线 364
11.6 长期成本 366
本章小结 371
第五部分 市场结构和企业战略
第12章 完全竞争市场中的企业 390
12.1 完全竞争市场 393
12.2 在完全竞争市场中企业如何实现最大利润 395
12.3 通过成本曲线图形解释企业盈利或亏损 398
12.4 企业在短期决定继续生产还是停业 403
12.5 企业在长期的进入和退出：“如果所有人能做，你就无法赚钱啦！” 407
12.6 完全竞争与效率 413
本章小结 415
第13章 垄断竞争：更切实际的竞争模型 424
13.1 垄断竞争市场中，企业的需求和边际收益 426
13.2 垄断竞争企业在短期如何实现利润最大化 248
13.3 利润在长期会发生什么变化 431
13.4 垄断竞争和完全竞争比较 436
13.5 怎样营销差别化产品 438
13.6 什么决定一个企业的成功 440
本章小结 441
第14章 寡头垄断：竞争不充分市场中的企业 450
14.1 寡头垄断和进入壁垒 452
14.2 使用博弈论分析寡头垄断 455
14.3 序贯博弈和企业策略 463
14.4 五力竞争模型 467
本章小结 469
第15章 垄断和反垄断政策 476
15.1 是否真的有垄断企业存在 478
15.2 垄断从何而来 480
15.3 垄断企业如何选择产量和价格水平 486
15.4 垄断会减损经济效率吗 490
15.5 政府治理垄断的政策 493
本章小结 499
第16章 定价策略 506
16.1 价格策略、一价定律和套利 508
16.2 差别定价：同种产品索取不同的价格 510
16.3 其他定价策略 519
本章小结 525
第六部分 劳动力市场、公共选择和收入分配
第17章 劳动和其他生产要素市场 532
17.1 对劳动的需求 534
17.2 劳动供给 538
17.3 劳动市场的均衡 540
17.4 工资差异的原因 544
17.5 人事经济学 554
17.6 资本和自然资源市场 556
本章小结 559
第18章 公共选择、税收和收入分配 568
18.1 公共政策 570
18.2 税收制度 574
18.3 税收归宿再议：价格弹性效应 581
18.4 收入分配和贫困 584
本章小结 594
Contents
Foreword
About the Authors
Preface
Glossary
Part 1: Introduction
Chapter 1: Economics: Foundations and Models 2
Appendix: Using Graphs and Formulas 24
Chapter 2: Trade-offs, Comparative Advantage, and the Market System 36
Chapter 3: Where Prices Come From: The Interaction of Demand and Supply 68
Chapter 4: Economic Efficiency, Government Price Setting, and Taxes 100
Appendix: Quantitative Demand and Supply Analysis 131
Part 2: Markets in Action: Policy and Applications
Chapter 5: Externalities, Environmental Policy, and Public Goods 136
Chapter 6: Elasticity: The Responsiveness of Demand and Supply 170
Chapter 7: The Economics of Health Care 204
Part 3: Firms in the Domestic and International Economies
Chapter 8: Firms, the Stock Market, and Corporate Governance 236
Appendix: Tools to Analyze Firms’ Financial Information 261
Chapter 9: Comparative Advantage and the Gains from International Trade
Part 4: Microeconomic Foundations: Consumers and Firms
Chapter 10: Consumer Choice and Behavioral Economics 304
Appendix: Using Indifference Curves and Budget Lines to Understand Consumer Behavior 335
Chapter 11: Technology, Production, and Costs 350
Appendix: Using Isoquants and Isocost Lines to Understand Production and Cost 379
Part 5: Market Structure and Firm Strategy
Chapter 12: Firms in Perfectly Competitive Markets 390
Chapter 13: Monopolistic Competition: The Competitive Model in a More Realistic Setting 424
Chapter 14: Oligopoly: Firms in Less Competitive Markets 450
Chapter 15: Monopoly and Antitrust Policy 476
Chapter 16: Pricing Strategy 506
Part 6: Labor Markets, Public Choice, and the Distribution of Income
Chapter 17: The Markets for Labor and Other Factors of Production 532
Chapter 18: Public Choice, Taxes, and the Distribution of Income 568
Foreword About the Authors Preface
Glossary
PArT 1: Introduction
Chapter 1: Economics: Foundations
and Models 2
Is the Private Doctor’s Office Going to Disappear 3
1.1 Three Key Economic Ideas 4
People Are Rational 5
People Respond to Economic Incentives 5
Making the Connection: Does Health Insurance
Give People an Incentive to Become Obese 5
Optimal Decisions Are Made at the Margin 7
Solved Problem 1.1: A Doctor Makes a Decision
at the Margin 7
1.2 The Economic Problem That Every Society
Must Solve 8
What Goods and Services Will Be Produced 9
How Will the Goods and Services Be Produced 9
Who Will Receive the Goods and Services Produced 9
Centrally Planned Economies versus Market Economies 9
The Modern “Mixed” Economy 10
Efficiency and Equity 11
1.3 Economic Models 11
The Role of Assumptions in Economic Models 12
Forming and Testing Hypotheses in Economic Models 12
Positive and Normative Analysis 13
Economics as a Social Science 14
Don’t Let This Happen to You: Don’t Confuse Positive Analysis with Normative Analysis 14
Making the Connection: Should Medical School Be Free 14
1.4 Microeconomics and Macroeconomics 15
1.5 A Preview of Important Economic Terms 16 Conclusion 17
An Inside Look: Look Into Your Smartphone and Say “Ahh” 18
Chapter 2: Trade-offs, Comparative Advantage, and the Market System 36
Managers at Tesla Motors Face Trade-Offs 37
2.1 Production Possibilities Frontiers and Opportunity Costs 38
Graphing the Production Possibilities Frontier 38
Solved Problem 2.1: Drawing a Production
Possibilities Frontier for Tesla Motors 40
Increasing Marginal Opportunity Costs 42
Economic Growth 43
2.2 Comparative Advantage and Trade 43
Specialization and Gains from Trade 44
Absolute Advantage versus Comparative Advantage 45
Comparative Advantage and the Gains from Trade 46
Don’t Let This Happen to You: Don’t Confuse
Absolute Advantage and Comparative Advantage 47
Solved Problem 2.2: Comparative Advantage and the Gains from Trade 47
Making the Connection: Comparative Advantage, Opportunity Cost, and Housework 49
2.3 The Market System 50
The Circular Flow of Income 50
The Gains from Free Markets 52
The Market Mechanism 52
Making the Connection: A Story of the Market System in Action: How Do You Make an iPad 53
The Role of the Entrepreneur 54
The Legal Basis of a Successful Market System 56
Making the Connection: Who Owns The Wizard of Oz 57
Conclusion 59
An Inside Look: What’s on the Horizon at Mercedes-Benz 60
Chapter 3: Where Prices Come From:The Interaction of Demand and Supply 68
Smartphones: The Indispensible Product 69
3.1 The Demand Side of the Market 70
Demand Schedules and Demand Curves 70
The Law of Demand 71
What Explains the Law of Demand 71
Holding Everything Else Constant: The Ceteris paribus Condition 72
Variables That Shift Market Demand 72
Making the Connection: Are Tablet Computers
Substitutes for E-Readers 73
Making the Connection: Coke and Pepsi Are
Hit by U.S. Demographics 74
A Change in Demand versus a Change in Quantity Demanded 75
Making the Connection: Forecasting the Demand
for iPhones 77
3.2 The Supply Side of the Market 78
Supply Schedules and Supply Curves 78
The Law of Supply 79
Variables That Shift Market Supply 80
A Change in Supply versus a Change in Quantity Supplied 81
3.3 Market Equilibrium: Putting Demand and Supply Together 82
How Markets Eliminate Surpluses and Shortages 83
Demand and Supply Both Count 84
Solved Problem 3.3: Demand and Supply Both Count: A Tale of Two Letters 84
3.4 The Effect of Demand and Supply Shifts on Equilibrium 85
The Effect of Shifts in Supply on Equilibrium 85
Making the Connection: The Falling Price of Blu-ray Players 86
The Effect of Shifts in Demand on Equilibrium 87
The Effect of Shifts in Demand and Supply over Time 87
Solved Problem 3.4: What Has Caused the Decline in Beef Consumption 88
Shifts in a Curve versus Movements along a Curve 90
Don’t Let This Happen to You: Remember: A Change in a Good’s Price Does Not Cause the Demand or Supply Curve to Shift 90
Conclusion 91
An Inside Look: Google and Apple Face
Supply and Demand Concerns in the
Smartphone Market 92
Chapter 4: Economic Efficiency, Government
Price Setting, and Taxes 100
The Sharing Economy, Phone Apps, and Rent Control 101
4.1 Consumer Surplus and Producer Surplus 102
Consumer Surplus 102
Making the Connection: The Consumer Surplus
from Broadband Internet Service 104
Producer Surplus 105
What Consumer Surplus and Producer Surplus Measure 106
4.2 The Efficiency of Competitive Markets 106
Marginal Benefit Equals Marginal Cost in Competitive Equilibrium 107
Economic Surplus 107
Deadweight Loss 108
Economic Surplus and Economic Efficiency 109
4.3 Government Intervention in the Market: Price Floors and Price Ceilings 109
Price Floors: Government Policy in Agricultural Markets 109
Making the Connection: Price Floors in Labor
Markets: The Debate over Minimum Wage
Policy 111 Price Ceilings: Government Rent Control Policy in Housing Markets 112
Don’t Let This Happen to You: Don’t Confuse
“Scarcity” with “Shortage” 113
Black Markets and Peer-to-Peer Sites 113
Solved Problem 4.3: What’s the Economic Effect
of a Black Market in Renting Apartments 114
The Results of Government Price Controls: Winners, Losers, and Inefficiency 115
Positive and Normative Analysis of Price Ceilings and Price Floors 115
4.4 The Economic Impact of Taxes 116
The Effect of Taxes on Economic Efficiency 116
Tax Incidence: Who Actually Pays a Tax 117
Solved Problem 4.4: When Do Consumers Pay All of a Sales Tax Increase 118
Making the Connection: Is the Burden of the Social Security Tax Really Shared Equally between Workers and Firms 119
Conclusion 121
An Inside Look At Policy: Does the Sharing Economy Increase Efficiency 122
PArT 2: Markets in Action: Policy and Applications
Chapter 5: Externalities, Environmental Policy, and Public Goods 136
Can Economic Policy Help Protect the Environment 137
5.1 Externalities and Economic Efficiency 138
The Effect of Externalities 138
Externalities and Market Failure 140
What Causes Externalities 140
5.2 Private Solutions to Externalities: The Coase Theorem 141
The Economically Efficient Level of Pollution Reduction 141
Making the Connection: The Clean Air Act: How a Government Policy Reduced Infant Mortality 142
The Basis for Private Solutions to Externalities 144
Don’t Let This Happen to You: Remember That It’s the Net Benefit That Counts 145
Making the Connection: The Fable of the Bees 145
Do Property Rights Matter 146
The Problem of Transactions Costs 146
The Coase Theorem 147
5.3 Government Policies to Deal with Externalities 147
Making the Connection: Should the Government Tax Cigarettes and Soda 148
Solved Problem 5.3: Dealing with the Externalities of Car Driving 150
Command-and-Control versus Market-Based Approaches 152
The End of the Sulfur Dioxide Cap-and-Trade System 152
Are Tradable Emission Allowances Licenses to Pollute 153
Making the Connection: Can a Carbon Tax Reduce Global Warming 153
5.4 Four Categories of Goods 154
The Demand for a Public Good 155
The Optimal Quantity of a Public Good 156
Solved Problem 5.4: Determining the Optimal Level of Public Goods 158
Common Resources 160
Conclusion 161
Chapter 6: Elasticity: The Responsiveness of Demand and Supply 170
Do People Respond to Changes in the Price of Gasoline 171
6.1 The Price Elasticity of Demand and Its Measurement 172
Measuring the Price Elasticity of Demand 172
Elastic Demand and Inelastic Demand 173
An Example of Computing Price Elasticities 173
The Midpoint Formula 174
Solved Problem 6.1: Calculating the Price Elasticity of Demand 175
When Demand Curves Intersect, the Flatter Curve Is More Elastic 176
Polar Cases of Perfectly Elastic and Perfectly Inelastic Demand 176
Don’t Let This Happen to You: Don’t Confuse Inelastic with Perfectly Inelastic 178
6.2 The Determinants of the Price Elasticity of Demand 178
Availability of Close Substitutes 178
Passage of Time 179
Luxuries versus Necessities 179
Definition of the Market 179
Share of a Good in a Consumer’s Budget 179
Some Estimated Price Elasticities of Demand 179
Making the Connection: The Price Elasticity of Demand for Breakfast Cereal 180
6.3 The Relationship between Price Elasticity of Demand and Total Revenue 181
Elasticity and Revenue with a Linear Demand Curve 182
Solved Problem 6.3: Price and Revenue Don’t Always Move in the Same Direction 183
Estimating Price Elasticity of Demand 184
6.4 Other Demand Elasticities 185
Cross-Price Elasticity of Demand 185
Income Elasticity of Demand 186
Making the Connection: Price Elasticity,
Cross-Price Elasticity, and Income Elasticity in the Market for Alcoholic Beverages 186
6.5 Using Elasticity to Analyze the Disappearing Family Farm 187
Solved Problem 6.5:Using Price Elasticity to Analyze a Policy of Taxing Gasoline 188
6.6 The Price Elasticity of Supply and Its Measurement 189
Measuring the Price Elasticity of Supply 189
Determinants of the Price Elasticity of Supply 190
Making the Connection: Why Are Oil Prices So Unstable 190
Polar Cases of Perfectly Elastic and Perfectly Inelastic Supply 191
Using Price Elasticity of Supply to Predict Changes in Price pply 193
Conclusion 194
Chapter 7: The Economics of Health Care 204
How Much Will You Pay for Health Insurance 205
7.1 The Improving Health of People in the United States 206
Changes over Time in U.S. Health 206
Reasons for Long-Run Improvements in U.S. Health 207
7.2 Health Care around the World 208
The U.S. Health Care System 208
The Health Care Systems of Canada, Japan, and the United Kingdom 210
Comparing Health Care Outcomes around the World 211
7.3 Information Problems and Externalities in the Market for Health Care 213
Adverse Selection and the Market for “Lemons” 213
Asymmetric Information in the Market for Health Insurance 213
Don’t Let This Happen to You: Don’t Confuse Adverse Selection with Moral Hazard 215
Solved Problem 7.3: If You Are Young and
Healthy, Should You Buy Health Insurance 216
Externalities in the Market for Health Care 217
Making the Connection: Should the Government Run the Health Care System 219
7.4 The Debate over Health Care Policy in the United States 220
The Rising Cost of Health Care 220
Making the Connection: Are U.S. Firms Handicapped by Paying for Their Employees’ Health Insurance 222
Explaining Rapid Increases in Health Care Spending 223
The Continuing Debate over Health Care Policy 225
Making the Connection: How Much Is That MRI Scan 227
Conclusion 229
PArT 3: Firms in the Domestic and International Economies
Chapter 8: Firms, the Stock Market, and Corporate Governance 236
Facebook Learns the Benefits and Costs of Becoming a Publicly Owned Firm 237
8.1 Types of Firms 238
Who Is Liable Limited and Unlimited Liability 238
Corporations Earn the Majority of Revenue and Profits 239
Making the Connection: How Important Are Small Businesses to the U.S. Economy 240
8.2 The Structure of Corporations and the Principal–Agent Problem 241
Corporate Structure and Corporate Governance 241
Solved Problem 8.2: Should a Firm’s CEO Also Be the Chairman of the Board 242
8.3 How Firms Raise Funds 242
Sources of External Funds 243
Making the Connection: The Rating Game: Is the U.S. Treasury Likely to Default on Its Bonds 244
Stock and Bond Markets Provide Capital—and Information 246
Don’t Let This Happen to You: When Facebook Shares Are Sold, Facebook Doesn’t Get the Money 246
Why Do Stock Prices Fluctuate So Much 247
Making the Connection: Following Abercrombie & Fitch’s Stock Price in the Financial Pages 248
8.4 Using Financial Statements to Evaluate a Corporation 249
The Income Statement 250
The Balance Sheet 251
8.5 Corporate Governance Policy and the Financial Crisis of 2007–2009 251
The Accounting Scandals of the Early 2000s 251
The Financial Crisis of 2007–2009 252
Did Principal–Agent Problems Help Cause the 2007–2009 Financial Crisis 253
Making the Connection: The Ups and Downs of Investing in Facebook 254
Conclusion 255
Chapter 9: Comparative Advantage and the Gains from International Trade 270
Saving Jobs in the U.S. Tire Industry 271
9.1 The United States in the International Economy 272
The Importance of Trade to the U.S. Economy 272
Making the Connection: Goodyear and the Tire Tariff 273
U.S. International Trade in a World Context 274
9.2 Comparative Advantage in International Trade 275
A Brief Review of Comparative Advantage 275
Comparative Advantage and Absolute Advantage 276
9.3 How Countries Gain from International Trade 277
Increasing Consumption through Trade 277
Solved Problem 9.3: The Gains from Trade 278
Why Don’t We See Complete Specialization 280
Does Anyone Lose as a Result of International Trade 280
Don’t Let This Happen to You: Remember That Trade Creates Both Winners and Losers 280
Where Does Comparative Advantage Come From 281
Making the Connection: Leaving New York City Is Risky for Financial Firms 282
Comparative Advantage over Time: The Rise and Fall—and Rise—of the U.S. Consumer Electronics Industry 283
9.4 Government Policies That Restrict International Trade 283
Tariffs 285 Quotas and Voluntary Export Restraints 286
Measuring the Economic Effect of the Sugar Quota 286
Solved Problem 9.4: Measuring the Economic
Effect of a Quota 287
The High Cost of Preserving Jobs with Tariffs and Quotas 288
Making the Connection: The Effect on the U.S.
Economy of the Tariff on Chinese Tires 289
Gains from Unilateral Elimination of Tariffs and Quotas 290
Other Barriers to Trade 290
9.5 The Arguments over Trade Policies and Globalization 290
Why Do Some People Oppose the World Trade Organization 291
Making the Connection: The Unintended
Consequences of Banning Goods Made
with Child Labor 292 Dumping 294
Positive versus Normative Analysis (Once Again) 294
Conclusion 295
PArT 4: Microeconomic Foundations: Consumers and Firms
Chapter 10: Consumer Choice and Behavioral Economics 304
J.C. Penney Learns That Simplifying Prices Isn’t Simple 305
10.1 Utility and Consumer Decision Making 306
The Economic Model of Consumer Behavior in a Nutshell 306
Utility 306
The Principle of Diminishing Marginal Utility 307
The Rule of Equal Marginal Utility per Dollar Spent 307
Solved Problem 10.1: Finding the Optimal Level of Consumption 310
What If the Rule of Equal Marginal Utility per Dollar Does Not Hold 311
Don’t Let This Happen to You: Equalize Marginal Utilities per Dollar 312
The Income Effect and Substitution Effect of a Price Change 313
10.2 Where Demand Curves Come From 314
Making the Connection: Are There Any Upward-Sloping Demand Curves in the Real World 316
10.3 Social Influences on Decision Making 317
The Effects of Celebrity Endorsements 317
Network Externalities
Does Fairness Matter
Making the Connection: What’s Up with “Fuel Surcharges”
10.4 Behavioral Economics: Do People Make Their Choices Rationally
Pitfalls in Decision Making
Making the Connection: A Blogger Who Understands the Importance of Ignoring Sunk Costs
The Behavioral Economics of Shopping
Making the Connection: J.C. Penney Meets
Behavioral Economics
Conclusion
Chapter 11: Technology, Production, and Costs 350
Fracking, Marginal Costs, and Energy Prices 351
11.1 Technology: An Economic Definition 352
Making the Connection: Improving Inventory Control at Wal-Mart 352
11.2 The Short Run and the Long Run in Economics 353
The Difference between Fixed Costs and Variable Costs 353
Making the Connection: Fixed Costs in the Publishing Industry 354
Implicit Costs Versus Explicit Costs 354
The Production Function 355
A First Look at the Relationship between Production and Cost 356
11.3 The Marginal Product of Labor and the Average Product of Labor 357
The Law of Diminishing Returns 357
Graphing Production 358
Making the Connection: Adam Smith’s Famous Account of the Division of Labor in a Pin Factory 359The Relationship between Marginal Product and Average Product 359
An Example of Marginal and Average Values: College Grades 360
11.4 The Relationship between Short-Run Production and Short-Run Cost 361
Marginal Cost 361
Why Are the Marginal and Average Cost Curves U Shaped 361
xiv DETAILED COnTEnTS Solved Problem 11.4: Calculating Marginal Cost and Average Cost 363
11.5 Graphing Cost Curves 364
11.6 Costs in the Long Run 366Economies of Scale 366
Long-Run Average Cost Curves for Automobile Factories 367
Solved Problem 11.6: Using Long-Run Average Cost Curves to Understand Business Strategy 367
Making the Connection: The Colossal River Rouge: Diseconomies of Scale at Ford Motor Company 369
Don’t Let This Happen to You: Don’t Confuse Diminishing Returns with Diseconomies of Scale 370
Conclusion 371
PArT 5: Market Structure and Firm Strategy
Chapter 12: Firms in Perfectly Competitive Markets 390
Perfect Competition in Farmers’ Markets 391
12.1 Perfectly Competitive Markets 393
A Perfectly Competitive Firm Cannot Affect the Market Price 393
The Demand Curve for the Output of a Perfectly Competitive Firm 394
Don’t Let This Happen to You: Don’t Confuse the Demand Curve for Farmer Parker’s
Wheat with the Market Demand Curve for Wheat 394
12.2 How a Firm Maximizes Profit in a Perfectly Competitive Market 395
Revenue for a Firm in a Perfectly Competitive Market 395
Determining the Profit-Maximizing Level of Output 396
12.3 Illustrating Profit or Loss on the Cost Curve Graph 398
Showing a Profit on the Graph 399
Solved Problem 12.3: Determining Profit- Maximizing Price and Quantity 399
Don’t Let This Happen to You: Remember That Firms Maximize Their Total Profit, Not Their Profit per Unit 401
Illustrating When a Firm Is Breaking Even or Operating at a Loss 402
Making the Connection: Losing Money in the Solar Panel Industry 402
12.4 Deciding Whether to Produce or to Shut Down in the Short Run 403
Solved Problem 12.4: When to Pull the Plug on a Movie 404
The Supply Curve of a Firm in the Short Run 405
The Market Supply Curve in a Perfectly Competitive Industry 406
12.5 “If Everyone Can Do It, You Can’t Make Money at It”: The Entry and Exit of Firms in the Long Run 407
Economic Profit and the Entry or Exit Decision 407
Long-Run Equilibrium in a Perfectly Competitive Market 409
The Long-Run Supply Curve in a Perfectly Competitive Market
Making the Connection: In the Apple iPhone Apps Store, Easy Entry Makes the Long Run Pretty Short
Increasing-Cost and Decreasing-Cost Industries
12.6 Perfect Competition and Efficiency
Productive Efficiency Solved Problem 12.6: How Productive Efficiency Benefits Consumers
Allocative Efficiency
Conclusion
Chapter 13: Monopolistic Competition: The Competitive Model in a More Realistic Setting
Starbucks: The Limits to Growth through Product Differentiation 425
13.1 Demand and Marginal Revenue for a Firm in a Monopolistically Competitive Market 426
The Demand Curve for a Monopolistically Competitive Firm 426
Marginal Revenue for a Firm with a Downward- Sloping Demand Curve 426
13.2 How a Monopolistically Competitive Firm Maximizes Profit in the Short Run 428
Solved Problem 13.2: Does Minimizing Cost Maximize Profit at Apple 430
13.3 What Happens to Profits in the Long Run 431
How Does the Entry of New Firms Affect the Profits of Existing Firms 431
Don’t Let This Happen to You: Don’t Confuse Zero Economic Profit with Zero Accounting Profit 432
Making the Connection: The Rise and Decline and Rise of Starbucks 434
Is Zero Economic Profit Inevitable in the Long Run 434
Solved Problem 13.3: Can It Be Profitable to Be the High-Price Seller 435
13.4 Comparing Monopolistic Competition and Perfect Competition 436
Excess Capacity under Monopolistic Competition 436
Is Monopolistic Competition Inefficient 436
How Consumers Benefit from Monopolistic Competition 437
Making the Connection: Peter Thiel, e-Cigarettes, and the Monopoly in Monopolistic Competition 438
13.5 How Marketing Differentiates Products 438
Brand Management 439
Advertising 439
Defending a Brand Name 439
13.6 What Makes a Firm Successful 440
Making the Connection: Is Being the First Firm in the Market a Key to Success 440
Conclusion 441
Chapter 14: Oligopoly: Firms in Less Competitive Markets 450
Competition in the Video Game Console Market 451
14.1 Oligopoly and Barriers to Entry 452
Barriers to Entry 453
14.2 Using Game Theory to Analyze Oligopoly 455
A Duopoly Game: Price Competition between Two Firms 455
Firm Behavior and the Prisoner’s Dilemma 456
Don’t Let This Happen to You: Don’t Misunderstand Why Each Firm Ends
Up Charging a Price of $399 457
Solved Problem 14.2: Is Same-Day Delivery a Prisoner’s Dilemma for Wal-Mart and Amazon 457
Making the Connection: Is There a Dominant Strategy for Bidding on eBay 458
Can Firms Escape the Prisoner’s Dilemma 459
Making the Connection: With Price Collusion,More Is Not Merrier 460
Cartels: The Case of OPEC 461
14.3 Sequential Games and Business Strategy 463
Deterring Entry 463
Solved Problem 14.3: Is Deterring Entry Always a Good Idea 464
Bargaining 465
14.4 The Five Competitive Forces Model 467
Competition from Existing Firms 467
The Threat from Potential Entrants 467
Competition from Substitute Goods or Services 467
The Bargaining Power of Buyers 468
The Bargaining Power of Suppliers 468
Making the Connection: Can We Predict
Which Firms Will Continue to Be Successful 468
Conclusion 469
Chapter 15: Monopoly and Antitrust Policy 476
A Monopoly on Lobster Dinners in Maine 477
15.1 Is Any Firm Ever Really a Monopoly 478
Making the Connection: Is Google a Monopoly 478
15.2 Where Do Monopolies Come From 479
Government Action Blocks Entry 480
Making the Connection: Does Hasbro Have a Monopoly on Monopoly 480
Control of a Key Resource 482
Making the Connection: Are Diamond Profits Forever The De Beers Diamond Monopoly 482
Network Externalities 483
Natural Monopoly 483
Solved Problem 15.2: Can a Seafood Restaurant Be a Natural Monopoly 484
15.3 How Does a Monopoly Choose Price and Output 486
Marginal Revenue Once Again 486
Profit Maximization for a Monopolist 486
Solved Problem 15.3: Finding the Profit- Maximizing Price and Output for a Cable Monopoly 488
Don’t Let This Happen to You: Don’t Assume That Charging a Higher Price Is Always More Profitable for a Monopolist 489
15.4 Does Monopoly Reduce Economic Efficiency 490
Comparing Monopoly and Perfect Competition 490
Measuring the Efficiency Losses from Monopoly 490
How Large Are the Efficiency Losses Due to Monopoly 492
Market Power and Technological Change 492
15.5 Government Policy toward Monopoly 493
Antitrust Laws and Antitrust Enforcement 493
Making the Connection: Did Apple Violate the Law in Pricing e-Books 494
Mergers: The Trade-off between Market Power and Efficiency 495
The Department of Justice and FTC Merger Guidelines 496
Regulating Natural Monopolies 498
Conclusion 499
Chapter 16: Pricing Strategy 506Getting into Walt Disney World: One Price Does Not Fit All 507
16.1 Pricing Strategy, the Law of One Price, and Arbitrage 508Arbitrage 508
Solved Problem 16.1: Is Arbitrage Just a Rip-Off 509
Why Don’t All Firms Charge the Same Price 509
16.2 Price Discrimination: Charging Different Prices for the Same Product 510
Don’t Let This Happen to You: Don’t Confuse Price Discrimination with Other Types of Discrimination 510
The Requirements for Successful Price Discrimination 511
Solved Problem 16.2: How Apple Uses Price Discrimination to Increase Profits 512
Airlines: The Kings of Price Discrimination 513
Making the Connection: How Colleges Use Yield Management 515
Perfect Price Discrimination 515
Price Discrimination across Time 517
Can Price Discrimination Be Illegal 517
Making the Connection: The Internet Leaves You Open to Price Discrimination 518
16.3 Other Pricing Strategies 519
Odd Pricing: Why Is the Price $2.99 Instead of $3.00 519
Why Do McDonald’s and other Firms Use Cost-Plus Pricing 520
Making the Connection: Cost-Plus Pricing in the Publishing Industry 521
Why Do Some Firms Use Two-Part Tariffs 522
Conclusion 525
Part 6: labor Markets, Public choice, and the distribution of income
Chapter 17: The Markets for Labor and Other Factors of Production 532
Who Is Zack Greinke and Why Is He Being Paid $147 Million 533
17.1 The Demand for Labor 534
The Marginal Revenue Product of Labor 534
Solved Problem 17.1: Hiring Decisions by a Firm That Is a Price Maker 536
The Market Demand Curve for Labor 537
Factors That Shift the Market Demand Curve for Labor 537
17.2 The Supply of Labor 538
The Market Supply Curve of Labor 539
Factors That Shift the Market Supply Curve of Labor 540
17.3 Equilibrium in the Labor Market 540
The Effect on Equilibrium Wages of a Shift in Labor Demand 541
Making the Connection: Will Your Future Income Depend on Which Courses You Take in College 542
The Effect on Equilibrium Wages of a Shift in Labor Supply 543
Making the Connection: Veterinarians Fall Victim to Demand and Supply 544
17.4 Explaining Differences in Wages 544
Don’t Let This Happen to You: Remember That Prices and Wages Are Determined at the
