Copyright 2021 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 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 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. Copyright 2021 Cengage Learning.
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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). Editorial 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.
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.
Copyright 2021 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 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). Editorial 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. Copyright 2021 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
WCN 02-200-203 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).
Editorial 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. PRINCIPLES OF MICRO ECONOMICS NINTH EDITION N. GREGORY MANKIW HARVARD UNIVERSITY Australia • Brazil • Mexico • Singapore • United Kingdom • United States Copyright 2021 Cengage Learning.
All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 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). Editorial 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.
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May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 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). Editorial 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. Principles of Microeconomics, Ninth Edition © 2021, 2018 Cengage Learning, Inc.
Gregory Mankiw Unless otherwise noted, all content is © Cengage. ALL RIGHTS RESERVED. No part of this work covered by the copyright Senior Vice President, Higher Education & Skills herein may be reproduced or distributed in any form or by any means, Product: Erin Joyner except as permitted by U. copyright law, without the prior written permission of the copyright owner.
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May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-203 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). Editorial 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. To Catherine, Nicholas, and Peter, my other contributions to the next generation Copyright 2021 Cengage Learning.
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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, m icroeconomics, statistics, and principles of economics. 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.
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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 subject 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.