Principles of Economics: 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 How does the economy coordinate interdependent economic 5 Elasticity and Its Application actors? Through the market forces of supply and demand.
6 Supply, Demand, and Government Policies 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 Why is the equilibrium of supply and demand desirable for society as a whole? The concepts of consumer and producer 8 Application: The Costs of Taxation surplus explain the efficiency of markets, the costs of taxation, and the benefits of international trade. 9 Application: International Trade The Economics of the Public Sector 10 Externalities Market outcomes are not always efficient, and governments 11 Public Goods and Common Resources can sometimes remedy market failure. 12 The Design of the Tax System 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 The theory of the firm sheds light on the decisions that lie behind supply in competitive markets. 14 Firms in Competitive Markets 15 Monopoly Firms with market power can cause market outcomes 16 Monopolistic Competition to be inefficient. 17 Oligopoly The Economics of Labor Markets 18 The Markets for the Factors of Production These chapters examine the special features of labor markets, 19 Earnings and Discrimination in which most people earn most of their income. 20 Income Inequality and Poverty Topics for Further Study 21 The Theory of Consumer Choice Additional topics in microeconomics include household decision making, asymmetric information, political economy, and 22 Frontiers of Microeconomics behavioral economics.
The Data of Macroeconomics 23 Measuring a Nation’s Income The overall quantity of production and the overall price level 24 Measuring the Cost of Living are used to monitor developments in the economy as a whole. The Real Economy in the Long Run 25 Production and Growth 26 Saving, Investment, and the Financial System These chapters describe the forces that in the long run determine key real variables, including GDP growth, saving, investment, 27 The Basic Tools of Finance real interest rates, and unemployment. 28 Unemployment Money and Prices in the Long Run 29 The Monetary System The monetary system is crucial in determining the long-run behavior of the price level, the inflation rate, and other 30 Money Growth and Inflation nominal variables. The Macroeconomics of Open Economies 31 Open-Economy Macroeconomics: A nation’s economic interactions with other nations are described Basic Concepts by its trade balance, net foreign investment, and exchange rate.
32 A Macroeconomic Theory of the A long-run model of the open economy explains the determinants Open Economy of the trade balance, the real exchange rate, and other real variables. Short-Run Economic Fluctuations 33 Aggregate Demand and Aggregate Supply The model of aggregate demand and aggregate supply explains 34 The Influence of Monetary and Fiscal Policy short-run economic fluctuations, the short-run effects of on Aggregate Demand monetary and fiscal policy, and the short-run linkage between 35 The Short-Run Trade-off between real and nominal variables. Inflation and Unemployment Final Thoughts A capstone chapter presents both sides of six major debates 36 Six Debates over Macroeconomic Policy over economic policy. Principles of Economics Ninth Edition N.
Gregory Mankiw Harvard University Australia • Brazil • Mexico • Singapore • United Kingdom • United States 38314_fm_hr_i-xxxii.indd 1 review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Editorial 23/09/19 11:58 am This is an electronic version of the print textbook. Due to electronic rights restrictions, some third party content may be suppressed.
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Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Editorial 23/09/19 11:58 am To Catherine, Nicholas, and Peter, my other contributions to the next generation 38314_fm_hr_i-xxxii.indd 3 review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Editorial 23/09/19 11:58 am About the Author N.
Gregory Mankiw is the Robert M. Beren Professor of Economics at Harvard University. As a student, he stud- ied economics at Princeton University and MIT. As a teacher, he has taught macroeconomics, microeconomics, statistics, and principles of e conomics.
He even spent one summer long ago as a sailing instructor on Long Beach Island. Professor Mankiw is a prolific writer and a regular participant in academic and policy debates. His work has been published in scholarly journals, such as the Jordi Cabré American Economic Review, Journal of Political Economy, and Quarterly Journal of Economics, and in more popu- lar forums, such as the New York Times and The Wall Street Journal. He is also author of the best-selling intermediate-level textbook Macroeconomics (Worth Publishers).
In addition to his teaching, research, and writing, Professor Mankiw has been a research associate of the National Bureau of Economic Research, an adviser to the Congressional Budget Office and the Federal Reserve Banks of Boston and New York, a trustee of the Urban Institute, and a member of the ETS test develop- ment committee for the Advanced Placement exam in economics. From 2003 to 2005, he served as chairman of the President’s Council of Economic Advisers. iv Copyright 2021 Cengage Learning. All Rights Reserved.
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Editorial 23/09/19 11:58 am Preface: To the Instructor D uring my 20-year career as a student, the course that excited me most was the two-semester sequence on the principles of economics that I took during my freshman year in college. It is no exaggeration to say that it changed my life. I had grown up in a family that often discussed politics over the dinner table. The pros and cons of various solutions to society’s problems generated fervent debate.
But in school, I had been drawn to the sciences. Whereas politics seemed vague, rambling, and subjective, science was analytic, systematic, and objective. While political debate continued without end, science made progress. My freshman course on the principles of economics opened my eyes to a new way of thinking.
Economics combines the virtues of politics and science. It is, truly, a social science. Its subject matter is society—how people choose to lead their lives and how they interact with one another—but it approaches the s ubject with the dispassion of a science. By bringing the methods of science to the questions of politics, economics tries to make progress on the challenges that all societies face.
I was drawn to write this book in the hope that I could convey some of the excitement about economics that I felt as a student in my first economics course. Economics is a subject in which a little knowledge goes a long way. (The same cannot be said, for instance, of the study of physics or the Chinese language.) Economists have a unique way of viewing the world, much of which can be taught in one or two semesters. My goal in this book is to transmit this way of thinking to the widest possible audience and to convince readers that it illuminates much about the world around them.
I believe that everyone should study the fundamental ideas that economics has to offer. One purpose of general education is to inform people about the world and thereby make them better citizens. The study of economics, as much as any disci- pline, serves this goal. Writing an economics textbook is, therefore, a great honor and a great responsibility.
It is one way that economists can help promote better government and a more prosperous future. As the great economist Paul Samuelson put it, “I don’t care who writes a nation’s laws, or crafts its advanced treaties, if I can write its economics textbooks.” What’s New in the Ninth Edition? Economics is fundamentally about understanding the world in which we live. Most chapters of this book include Case Studies illustrating how the principles of economics can be applied. In addition, In the News boxes offer excerpts from newspapers, magazines, and online news sources showing how economic ideas shed light on current issues facing society.
After students finish their first course v Copyright 2021 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
38314_fm_hr_i-xxxii.indd 5 review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Editorial 23/09/19 11:58 am vi Preface: To the Instructor in economics, they should think about news stories from a new perspective and with greater insight.