1. Introduction to Economic Thinking

• 1.1 The Basics of Economics
  • 1.1.1 Defining Economics
  • 1.1.2 What Economists Do
  • 1.1.3 Macroeconomics and Microeconomics
  • 1.1.4 An Overview of Economic Systems
  • 1.1.5 Case Study: The Work of Adam Smith

• 1.2 Graphs in Economics
  • 1.2.1 Using Graphs to Understand Direct Relationships
  • 1.2.2 Plotting a Linear Relationship between Two Variables
  • 1.2.3 Changing the Intercept of a Linear Function
  • 1.2.4 Understanding the Slope of a Linear Function

• 1.3 Advanced Graphical Concepts
  • 1.3.1 Understanding Tangent Lines
  • 1.3.2 Working with Three Variables on a Graph

• 1.4 Production Possibilities
  • 1.4.1 Understanding the Concept of Production Possibilities Frontiers
  • 1.4.2 Understanding How a Change in Technology or Resources Affects the PPF
  • 1.4.3 Deriving an Algebraic Equation for the Production Possibilities Frontier

• 1.5 Comparative Advantage
  • 1.5.1 Defining Comparative Advantage with the Production Possibilities Frontier
  • 1.5.2 Understanding Why Specialization Increases Total Output
  • 1.5.3 Analyzing International Trade Using Comparative Advantage
  • 1.5.4 Outsourcing

2. Understanding Markets

• 2.1 Demand
  • 2.1.1 Understanding the Determinants of Demand
  • 2.1.2 Understanding the Basics of a Demand Curve
  • 2.1.3 Analyzing Shifts in the Demand Curve
  • 2.1.4 Changing Other Demand Variables
  • 2.1.5 Deriving a Market Demand Curve

• 2.2 Supply
  • 2.2.1 Understanding the Determinants of Supply
  • 2.2.2 Deriving a Supply Curve
  • 2.2.3 Understanding a Change in Supply versus a Change in Quantity Supplied
  • 2.2.4 Analyzing Changes in Other Supply Variables
  • 2.2.5 Deriving a Market Supply Curve from Individual Supply Curves

• 2.3 Equilibrium
  • 2.3.1 Determining a Competitive Equilibrium
  • 2.3.2 Defining Comparative Statics
  • 2.3.3 Classifying Comparative Statics

• 2.4 Elasticity
  • 2.4.1 Defining Elasticity
  • 2.4.2 Calculating Elasticity
  • 2.4.3 Applying the Concept of Elasticity
  • 2.4.4 Identifying the Determinants of Elasticity
  • 2.4.5 Understanding the Relationship between Total Revenue and Elasticity

• 2.5 Interfering with Markets
  • 2.5.1 Understanding How Price Controls Damage Markets
  • 2.5.2 Understanding the Problem of Minimum Wages in Labor Markets
  • 2.5.3 Understanding How an Excise Tax Affects Equilibrium

• 2.6 Agriculture Economics
  • 2.6.1 Examining Problems in Agricultural Economics

3. Consumer Choice and Household Behavior

• 3.1 Utility Theory
  • 3.1.1 Understanding Utility Theory
  • 3.1.2 Finding Consumer Equilibrium

• 3.2 Budget Constraints and Indifference Curves
  • 3.2.1 Constructing a Consumer's Budget Constraint
  • 3.2.2 Understanding a Change in the Budget Constraint
  • 3.2.3 Understanding Indifference Curves

• 3.3 Consumer Optimization
  • 3.3.1 Locating the Consumer's Optimal Combination of Goods
  • 3.3.2 Understanding the Effects of a Price Change on Consumer Choice
  • 3.3.3 Deriving the Demand Curve

4. Production and Costs

• 4.1 The Basics of Production
  • 4.1.1 Understanding Output, Inputs, and the Short Run
  • 4.1.2 Explaining the Total Product Curve
  • 4.1.3 Drawing Marginal Product Curves
  • 4.1.4 Understanding Average Product
  • 4.1.5 Relating Costs to Productivity

• 4.2 Variable Costs
  • 4.2.1 Defining Variable Costs
  • 4.2.2 Graphing Variable Costs
  • 4.2.3 Graphing Variable Costs Using a Geometric Trick

• 4.3 Marginal Costs
  • 4.3.1 Defining Marginal Costs
  • 4.3.2 Deriving the Marginal Cost Curve
  • 4.3.3 Understanding the Mathematical Relationship between Marginal Cost and Marginal Product

• 4.4 Average Costs
  • 4.4.1 Defining Average Variable Costs
  • 4.4.2 Understanding the Relationship between Average Variable Cost and Average Product of Labor
  • 4.4.3 Understanding the Relationship between Marginal Cost and Average Variable Cost

• 4.5 Total Costs
  • 4.5.1 Defining and Graphing Average Fixed Cost and Average Total Cost
  • 4.5.2 Calculating Average Total Cost
  • 4.5.3 Putting the Cost Curves Together

• 4.6 Long-Run Production and Costs
  • 4.6.1 Defining the Long Run
  • 4.6.2 Determining a Firm's Returns to Scale
  • 4.6.3 Understanding Short-Run and Long-Run Average Cost Curves
  • 4.6.4 Shifts in Cost Curves

• 4.7 Isocost/Isoquant Analysis
  • 4.7.1 Constructing Isocost Lines
  • 4.7.2 Understanding Isoquants
  • 4.7.3 Finding the Cost-Minimizing Combination of Capital and Labor

5. Perfect Competition

• 5.1 The Basic Assumptions of Competitive Markets
  • 5.1.1 Calculating Total Revenue
  • 5.1.2 Understanding the Role of Price
  • 5.1.3 Understanding Market Structures
  • 5.1.4 Finding Economic and Accounting Profit

• 5.2 Calculating Profit and Loss
  • 5.2.1 Finding the Firm's Profit-Maximizing Output Level
  • 5.2.2 Proving the Profit-Maximizing Rule
  • 5.2.3 Calculating Profit
  • 5.2.4 Calculating Loss
  • 5.2.5 Finding the Firm's Shut-Down Point

• 5.3 Market Supply
  • 5.3.1 Deriving the Short-Run Market Supply Curve
  • 5.3.2 Relating the Individual Firm to the Market
  • 5.3.3 Examining Shifts in the Short-Run Market Supply Curve
  • 5.3.4 Deriving the Long-Run Market Supply Curve

• 5.4 Competitive Firms' Responses to Price Changes
  • 5.4.1 Examining the Firm's Long-Run and Short-Run Adjustments to a Price Increase

6. Other Market Models

• 6.1 Monopolies
  • 6.1.1 Defining Monopoly Power
  • 6.1.2 Defining Marginal Revenue for a Firm with Market Power
  • 6.1.3 Determining the Monopolist's Profit-Maximizing Output and Price
  • 6.1.4 Calculating a Monopolist's Profit and Loss
  • 6.1.5 Graphing the Relationship between Marginal Revenue and Elasticity

• 6.2 The Social Cost of Monopoly
  • 6.2.1 Determining the Social Cost of Monopoly
  • 6.2.2 Calculating Deadweight Loss
  • 6.2.3 Understanding Monopoly Regulation

• 6.3 Oligopoly
  • 6.3.1 Introducing Oligopoly and the Prisoner's Dilemma
  • 6.3.2 Understanding a Cartel As a Prisoner's Dilemma
  • 6.3.3 Understanding the Kinked-Demand Curve Model

• 6.4 Monopolistic Competition
  • 6.4.1 Defining Monopolistic Competition
  • 6.4.2 Understanding Pricing and Output under Monopolistic Competition
  • 6.4.3 Understanding Monopolistic Competition As a Prisoner's Dilemma

7. Resource Markets

• 7.1 The Derived Demand for Labor
  • 7.1.1 Deriving the Factor Demand Curve
  • 7.1.2 Deriving the Least-Cost Rule
  • 7.1.3 Analyzing the Labor Market

• 7.2 Monopsony
  • 7.2.1 Understanding Labor Market Power and Marginal Factor Cost

• 7.3 Capital Markets
  • 7.3.1 Analyzing Capital Markets

8. Market Failures

• 8.1 Overview of Market Failures
  • 8.1.1 Understanding Market Failures

• 8.2 Public Goods and Public Choice
  • 8.2.1 Defining Public Goods
  • 8.2.2 Analyzing the Tax System
  • 8.2.3 Understanding Public Choice

• 8.3 Uncertainty
  • 8.3.1 Understanding Expected Value, Risk, and Uncertainty
  • 8.3.2 Understanding Asymmetric Information as an Economic Problem
  • 8.3.3 Understanding Moral Hazards in Markets

• 8.4 Externalities
  • 8.4.1 Defining Externalities
  • 8.4.2 Explaining How to Internalize External Costs
  • 8.4.3 Explaining How to Internalize External Benefits

• 8.5 Solutions to Externalities
  • 8.5.1 Finding a Market Solution to External Costs
  • 8.5.2 Finding a Negotiated Settlement to an External Cost
  • 8.5.3 Applying the Coase Theorem

9. Evaluating Market Outcomes

• 9.1 Normative Economics
  • 9.1.1 Measuring the Benefits of Consumption
  • 9.1.2 Using the Demand Curve As a Measure of Benefit

• 9.2 Calculating Total Economic Value
  • 9.2.1 Quantifying Social Benefit
  • 9.2.2 Quantifying Social Cost
  • 9.2.3 Determining Total Social Cost
  • 9.2.4 Understanding Economic Value

• 9.3 Consumer and Producer Surplus
  • 9.3.1 Understanding Producer and Consumer Surpluses
  • 9.3.2 Calculating Total Economic Value

• 9.4 Market Interference and Economic Value
  • 9.4.1 Understanding the Effects of Price Controls
  • 9.4.2 Understanding How Price Controls Destroy Economic Value
  • 9.4.3 Evaluating the Effects of an Excise Tax
  • 9.4.4 Assessing the Effect of an Excise Tax on Economic Value
  • 9.4.5 Understanding How a Tax Can Create Deadweight Loss

• 9.5 International Trade and Economic Value
  • 9.5.1 Evaluating the Gains from International Trade
  • 9.5.2 Understanding the Effects of Tariffs on Consumer and Producer Surpluses

10. Macroeconomic Measurements

• 10.1 Aggregate Output and Income
  • 10.1.1 The Production Possibilities Frontier: Macroeconomic Applications
  • 10.1.2 The Circular Flow Model
  • 10.1.3 Real GDP
  • 10.1.4 The BEA Procedure for Calculating Real GDP
  • 10.1.5 Limitations of GDP and Alternative Indexes
  • 10.1.6 The Growth of China as a Superpower

• 10.2 Approaches to Calculating GDP
  • 10.2.1 The Expenditures Approach
  • 10.2.2 The Income Approach

• 10.3 Cost of Living
  • 10.3.1 Changes in the Cost of Living and the CPI
  • 10.3.2 Calculating the Rate of Inflation
  • 10.3.3 Comparing the CPI and the GDP Deflator
  • 10.3.4 Hot Topic: Income Distribution in the United States

11. Economic Fluctuations: Unemployment and Inflation

• 11.1 The Business Cycle
  • 11.1.1 Recessions, Depressions, and Booms
  • 11.1.2 Theoretical Explanations for Cycles

• 11.2 Measuring Unemployment
  • 11.2.1 Measuring the Labor Force and Unemployment
  • 11.2.2 Types of Unemployment

• 11.3 The Natural Rate of Unemployment
  • 11.3.1 Understanding the Natural Rate of Unemployment

• 11.4 Causes of Unemployment
  • 11.4.1 Minimum Wage Laws
  • 11.4.2 An Analysis of Labor Unions and Unemployment
  • 11.4.3 Case Study: "La Causa": The United Farm Workers
  • 11.4.4 The Theory of Efficiency Wages
  • 11.4.5 Unemployment Insurance

• 11.5 Inflation
  • 11.5.1 Inflation, Deflation, Stagflation, and Hyperinflation
  • 11.5.2 Inflation and Purchasing Power
  • 11.5.3 Short-Run Causes: Demand-Pull and Cost-Push Inflation
  • 11.5.4 The Quantity Theory of Money
  • 11.5.5 The Costs of Inflation
  • 11.5.6 Case Study: Behavior during Hyperinflation

12. The Aggregate Expenditures Model

• 12.1 Historical Background
  • 12.1.1 Say's Law and Keynes: An Overview

• 12.2 Components of Aggregate Expenditures
  • 12.2.1 The Aggregate Expenditures Identity
  • 12.2.2 Average and Marginal Propensities to Consume and Save
  • 12.2.3 The Aggregate Expenditures Model
  • 12.2.4 Case Study: The Paradox of Thrift
  • 12.2.5 Autonomous Investment

• 12.3 Equilibrium GDP
  • 12.3.1 The Expenditures Approach and the Savings Approach

• 12.4 The Multipliers
  • 12.4.1 Applications of the Multipliers

• 12.5 Comparative Statics: The AE Model
  • 12.5.1 Changes in Aggregate Expenditures
  • 12.5.2 Changes in Taxes
  • 12.5.3 Changes in Net Exports
  • 12.5.4 Hot Topic: Does Social Security Need to Be "Saved"?

13. Money: Banking, Spending, Saving, and Investing

• 13.1 Money in the Economy
  • 13.1.1 The Money Supply
  • 13.1.2 Determinants of Money Demand
  • 13.1.3 The Money Market

• 13.2 Financial Markets
  • 13.2.1 Financial Markets and Intermediaries
  • 13.2.2 Stocks and Bonds
  • 13.2.3 The Price of Bonds and the Interest Rate

• 13.3 The Fed
  • 13.3.1 The Federal Reserve System
  • 13.3.2 Hot Topic: Are Reserve Requirements Necessary?
  • 13.3.3 The Fed's Tools of Monetary Policy
  • 13.3.4 Case Study: The Greenspan Era

• 13.4 The Creation of Money
  • 13.4.1 How Goldsmiths Created Money
  • 13.4.2 Case Study: Cigarettes As Money
  • 13.4.3 How Banks Create Money
  • 13.4.4 How the Fed Changes the Money Supply

• 13.5 Saving and Investment
  • 13.5.1 Investment Demand
  • 13.5.2 The Market for Loanable Funds and Crowding Out
  • 13.5.3 Equilibrium in the Money Market

14. Aggregate Demand/Aggregate Supply Model

• 14.1 Aggregate Demand
  • 14.1.1 Deriving the Aggregate Demand Curve
  • 14.1.2 Movement along the Aggregate Demand Curve
  • 14.1.3 Shifts in Aggregate Demand

• 14.2 Aggregate Supply
  • 14.2.1 The Short-Run Aggregate Supply Curve
  • 14.2.2 The Labor Market
  • 14.2.3 The Long-Run Aggregate Supply Curve

• 14.3 Differences in the Long Run and the Short Run
  • 14.3.1 The Classical View
  • 14.3.2 Equilibrium in the Short Run
  • 14.3.3 Equilibrium in the Long Run
  • 14.3.4 Expectations in the Long Run and the Short Run
  • 14.3.5 Long-Run Macroeconomic Equilibrium
  • 14.3.6 Case Study: The U.S. National Debt
  • 14.3.7 Hot Topic: Oil Shocks

• 14.4 The Phillips Curve
  • 14.4.1 Definitions and the Historical Record
  • 14.4.2 Expectations and the Phillips Curve

15. Monetary and Fiscal Policy

• 15.1 Recessions and Booms
  • 15.1.1 Unanticipated Changes in Aggregate Demand
  • 15.1.2 Unanticipated Changes in Aggregate Supply

• 15.2 Fiscal Policy: The Mainstream
  • 15.2.1 Fiscal Policy Using the AD/AS Model
  • 15.2.2 The Market for Loanable Funds and Government Policy
  • 15.2.3 Timing Problems and the AD/AS Model
  • 15.2.4 Automatic Stabilizers
  • 15.2.5 Hot Topic: The Political Business Cycle

• 15.3 Fiscal Policy: Alternative Approaches
  • 15.3.1 New Keynesian and New Classical Approaches to Fiscal Policy
  • 15.3.2 Supply-Side Policy

• 15.4 Monetary Policy: The Mainstream
  • 15.4.1 The Quantity Theory of Money (review)
  • 15.4.2 Monetary Policy Using the AD/AS Model
  • 15.4.3 Monetary Responses to Changes in the Economy
  • 15.4.4 Monetary Policy: Accommodation
  • 15.4.5 Hot Topic: Should Monetary Policy Be Made by Rule or Discretion?

• 15.5 Monetary Policy: Alternative Approaches
  • 15.5.1 New Keynesians versus Monetarists
  • 15.5.2 New Classical Macroeconomics
  • 15.5.3 Case Study: Policy in the Great Depression

16. Productivity and Growth

• 16.1 The Elements of Productivity and Growth
  • 16.1.1 The Rule of 70, Compounding, and Growth
  • 16.1.2 The PPF, the AD/AS Model, and Long-Run Growth
  • 16.1.3 The Production Function and Growth
  • 16.1.4 The Definition of Productivity and Factors Affecting It

• 16.2 Policy and Growth
  • 16.2.1 Investment
  • 16.2.2 Other Policies to Encourage Growth
  • 16.2.3 Hot Topic: Women's Roles in Rural Economic Growth

• 16.3 Emerging Economies
  • 16.3.1 Growth in Emerging Economies
  • 16.3.2 Policies to Promote Growth
  • 16.3.3 Hot Topic: The Myth of Exploding Populations

17. International Focus

• 17.1 Microeconomics Background
  • 17.1.1 Determining the Difference between a Closed Economy and an Open Economy
  • 17.1.2 Understanding Exports in an Open Economy
  • 17.1.3 Analyzing a Change in Equilibrium in an Open Economy
  • 17.1.4 Analyzing International Trade Using Comparative Advantage

• 17.2 Exports, Imports, and Accounting
  • 17.2.1 The International Flow of Goods and Services
  • 17.2.2 Balance of Payments
  • 17.2.3 Balance of Payments: An Example
  • 17.2.4 Trade Balances

• 17.3 Exchange Rates
  • 17.3.1 Nominal Exchange Rates
  • 17.3.2 Real Exchange Rates
  • 17.3.3 Purchasing Power Parity
  • 17.3.4 Determination of Exchange Rates
  • 17.3.5 Floating and Fixed Systems
  • 17.3.6 The Managed Float

• 17.4 Government Policies
  • 17.4.1 Government Budget Deficits and Trade
  • 17.4.2 Trade Policy
  • 17.4.3 Hot Topic: Winners and Losers in NAFTA
  • 17.4.4 Political Instability and Trade
  • 17.4.5 Hot Topic: Is the World Trade Organization a Conspiracy?

• 17.5 Transition Economies
  • 17.5.1 Centrally Planned Economies
  • 17.5.2 Policies to Change to Market Systems
  • 17.5.3 Comparative Economic Performance