Principles of Microeconomics: a Guided Tour Introduction 1 Ten Principles of Economics The study of economics is guided by a few big ideas. 2 Thinking Like an Economist Economists view the world as both scientists and policymakers. 3 Interdependence and the Gains from Trade The theory of comparative advantage explains how people benefit from economic interdependence. How Markets Work 4 The Market Forces of Supply and Demand 5 Elasticity and Its Application 6 Supply, Demand, and Government Policies How does the economy coordinate interdependent economic actors? Through the market forces of supply and demand. The tools of supply and demand are put to work to examine the effects of various government policies. Markets and Welfare 7 Consumers, Producers, and the Efficiency of Markets 8 Application: The Costs of Taxation 9 Application: International Trade Why is the equilibrium of supply and demand desirable for society as a whole? The concepts of consumer and producer surplus explain the efficiency of markets, the costs of taxation, and the benefits of international trade. The Economics of the Public Sector 10 Externalities 11 Public Goods and Common Resources 12 The Design of the Tax System Market outcomes are not always efficient, and governments can sometimes remedy market failure. To fund programs, governments raise revenue through their tax systems, which are designed with an eye toward balancing efficiency and equity. Firm Behavior and the Organization of Industry 13 The Costs of Production 14 Firms in Competitive Markets The theory of the firm sheds light on the decisions that lie behind supply in competitive markets. 15 Monopoly 16 Monopolistic Competition Firms with market power can cause market outcomes to be inefficient. 17 Oligopoly The Economics of Labor Markets 18 The Markets for the Factors of Production 19 Earnings and Discrimination These chapters examine the special features of labor markets, in which most people earn most of their income. 20 Income Inequality and Poverty Topics for Further Study 21 The Theory of Consumer Choice 22 Frontiers of Microeconomics Additional topics in microeconomics include household decision making, asymmetric information, political economy, and behavioral economics.

Principles of Microeconomics a Guided Tour

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