Hp envy 750qd desktop pc

Dear Stud ent,

My object ive in writ

ing this b ook is to

provide yo u with ev

erything y ou need f

or

success in the cours

e and to i mprove y

our ability to make

better dec isions in y

our

everyday life – espe

cially und erstandin

g econom ic issues i

n the new s. My wri

ting

style is int ended to

be engag ing, clear,

and strai ghtforwa

rd with an emphasis

on

real-world applicatio

ns. As I w as writing

the text, I viewed m

yself expla ining the

concepts to a stude

nt in my o ffice. As a

result, th ere is a co

nversation al tone to

the text. T o avoid b

oredom, t he text us

es a fast-p aced, acti

on-packe d approac

h

that expla ins all ess

ential con cepts with

out becom ing an en

cyclopedi a.

As a princ iples of ec

onomics i nstructor

for over 3 0 years, I

know from first-hand

experienc e that ma

ny studen ts are app

rehensive about ta

king econ omics. In

fact,

I still reca ll vividly t

hat, as a freshman

about to take my

first econ omics cou

rse,

I had only the vagu

est idea o f what th

is subject was abou

t. To my d elight, my

freshman principles

of econo mics cour

se opened my eyes

to a new way of

thinking. And my y

ears of te aching th

is powerf ul reasoni

ng proces s inspired

me

to try to w rite a text

that conv eyed my e

xcitement about ec

onomics t o student

s.

Please rea d through

the prefa ce, which

takes you on a tou

r of the sp ecial

pedagogi cal featur

es and an cillary ma

terials tha t have be

en create d to help

you maxim ize your le

arning ex perience w

ith this te xtbook.

Regards,

Irvin Tuck er

Irvin Tucker

9780538469418_mic_se_wkg.indd 29780538469418_mic_se_wkg.indd 2 8/14/10 1:18 AM8/14/10 1:18 AM

Copyright 2010 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.

Dear Stud ent,

My object ive in writ

ing this b ook is to

provide yo u with ev

erything y ou need f

or

success in the cours

e and to i mprove y

our ability to make

better dec isions in y

our

everyday life – espe

cially und erstandin

g econom ic issues i

n the new s. My wri

ting

style is int ended to

be engag ing, clear,

and strai ghtforwa

rd with an emphasis

on

real-world applicatio

ns. As I w as writing

the text, I viewed m

yself expla ining the

concepts to a stude

nt in my o ffice. As a

result, th ere is a co

nversation al tone to

the text. T o avoid b

oredom, t he text us

es a fast-p aced, acti

on-packe d approac

h

that expla ins all ess

ential con cepts with

out becom ing an en

cyclopedi a.

As a princ iples of ec

onomics i nstructor

for over 3 0 years, I

know from first-hand

experienc e that ma

ny studen ts are app

rehensive about ta

king econ omics. In

fact,

I still reca ll vividly t

hat, as a freshman

about to take my

first econ omics cou

rse,

I had only the vagu

est idea o f what th

is subject was abou

t. To my d elight, my

freshman principles

of econo mics cour

se opened my eyes

to a new way of

thinking. And my y

ears of te aching th

is powerf ul reasoni

ng proces s inspired

me

to try to w rite a text

that conv eyed my e

xcitement about ec

onomics t o student

s.

Please rea d through

the prefa ce, which

takes you on a tou

r of the sp ecial

pedagogi cal featur

es and an cillary ma

terials tha t have be

en create d to help

you maxim ize your le

arning ex perience w

ith this te xtbook.

Regards,

Irvin Tuck er

Irvin Tucker

9780538469418_mic_se_wkg.indd 29780538469418_mic_se_wkg.indd 2 8/14/10 1:18 AM8/14/10 1:18 AM

Copyright 2010 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.

Microeconomics for Today

IRVIN B. TUCKER UNIVERSITY OF NORTH CAROLINA CHARLOTTE

7 T H E D I T I O N

Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States

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iii

IRVIN B. TUCKER Irvin B. Tucker has over thirty years of experience teaching introductory economics at the University of North Carolina Charlotte. He earned his B.S. in economics at N.C. State University and his M.A. and Ph.D. in economics from the University of South Carolina. Dr. Tucker is former director of the Center for Economic Education at the University of North Carolina Charlotte and a longtime member of the National Council on Economic Education. He is recognized for his ability to relate basic principles to economic issues and public policy. His work has received national recognition by being awarded the Meritorious Levy Award for Excellence in Private Enterprise Education, the Federation of Independent Business Award for Postsecondary Educator of the Year in Entrepreneurship and Economic Education, and the Freedom Foundation’s George Washington Medal for Excellence in Economic Education. In addition, his research has been published in numer- ous professional journal articles on a wide range of topics including industrial organiza- tion, entrepreneurship, and economics of education. Dr. Tucker is also the author of the highly successful Survey of Economics, seventh edition, a text for the one-semester principles of economics courses, published by Cengage South-Western Publishing.

About the Author

Copyright 2010 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.

iv

Brief Contents

PART 1 Introduction to Economics 1 Chapter 1 Introducing the Economic Way of Thinking 2 Appendix to Chapter 1: Applying Graphs

to Economics 21

Chapter 2 Production Possibilities, Opportunity Cost, and Economic Growth 34

PART 2 Microeconomic Fundamentals 57 Chapter 3 Market Demand and Supply 58 Appendix to Chapter 3: Consumer Surplus,

Producer Surplus, and Market Effi ciency 91

Chapter 4 Markets in Action 100 Appendix to Chapter 4: Applying Supply

and Demand Analysis to Health Care 125

Chapter 5 Price Elasticity of Demand and Supply 129

Chapter 6 Consumer Choice Theory 153 Appendix to Chapter 6: Indifference Curve Analysis 168

Chapter 7 Production Costs 181

PART 3 Market Structures 211 Chapter 8 Perfect Competition 212

Chapter 9 Monopoly 240

Chapter 10 Monopolistic Competition and Oligopoly 267

Chapter 11 Labor Markets 294

PART 4 Microeconomic Policy Issues 321 Chapter 12 Income Distribution, Poverty, and Discrimination 322

Chapter 13 Antitrust and Regulation 348

Chapter 14 Environmental Economics 373

PART 5 The International Economy 401 Chapter 15 International Trade and Finance 402

Chapter 16 Economies in Transition 434

Chapter 17 Growth and the Less-Developed Countries 457

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v

Appendix A Answers to Odd-Numbered Study Questions and Problems 481

Appendix B Answers to Practice Quizzes 495

Appendix C Answers to Road Map Questions 497

Glossary 498

Index 511

BRIEF CONTENTS

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vi

Contents

About the Author iii

Preface xvi

PART 1

Introduction to Economics 1

CHAPTER 1

Introducing the Economic Way of Thinking 2

The Problem of Scarcity 3

Scarce Resources and Production 3

Economics: The Study of Scarcity and Choice 5

The Methodology of Economics 6

CHECKPOINT Can You Prove There Is No Trillion-Dollar Person? 9

Hazards of the Economic Way of Thinking 9

CHECKPOINT Should Nebraska State Join a Big-Time Athletic Conference? 10

YOU’RE THE ECONOMIST Mops and Brooms, the Boston Snow Index, the Super Bowl, and Other Economic Indicators 11

Why Do Economists Disagree? 12

Careers in Economics 13

YOU’RE THE ECONOMIST Does Raising the Minimum Wage Help the Working Poor? 14

APPENDIX TO CHAPTER 1

Applying Graphs to Economics 21

A Direct Relationship 21

An Inverse Relationship 23

The Slope of a Straight Line 24

The Slope of a Curve 26

A Three-Variable Relationship in One Graph 27

A Helpful Study Hint for Using Graphs 29

1

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CONTENTS vii

CHAPTER 2

Production Possibilities, Opportunity Cost, and Economic Growth 34

Three Fundamental Economic Questions 35

Opportunity Cost 36

Marginal Analysis 37

The Production Possibilities Curve 38

The Law of Increasing Opportunity Costs 40

Sources of Economic Growth 42

YOU’RE THE ECONOMIST FedEx Wasn’t an Overnight Success 45

CHECKPOINT What Does a War on Terrorism Really Mean? 45

Present Investment and the Future Production Possibilities Curve 46

GLOBAL ECONOMICS How Does Public Capital Affect a Nation’s Curve? 47

PART 1 ROAD MAP 54

PART 2

Microeconomic Fundamentals 57

CHAPTER 3

Market Demand and Supply 58

The Law of Demand 59

The Distinction Between Changes in Quantity Demanded and Changes in Demand 61

Nonprice Determinants of Demand 63

CHECKPOINT Can Gasoline Become an Exception to the Law of Demand? 66

The Law of Supply 68

CHECKPOINT Can the Law of Supply Be Repealed for the Oil Market? 70

The Distinction Between Changes in Quantity Supplied and Changes in Supply 70

Nonprice Determinants of Supply 74

YOU’RE THE ECONOMIST PC Prices: How Low Can They Go? 75

GLOBAL ECONOMICS The Market Approach to Organ Shortages 78

2

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viii CONTENTS

A Market Supply and Demand Analysis 78

Rationing Function of the Price System 82

CHECKPOINT Can the Price System Eliminate Scarcity? 82

APPENDIX TO CHAPTER 3

Consumer Surplus, Producer Surplus, and Market Effi ciency 91

Consumer Surplus 91

Producer Surplus 92

Market Effi ciency 94

CHAPTER 4

Markets in Action 100

Changes in Market Equilibrium 101

CHECKPOINT Why the Higher Price for Ethanol Fuel? 104

Can the Laws of Supply and Demand Be Repealed? 105

YOU’RE THE ECONOMIST Rigging the Market for Milk 110

CHECKPOINT Is There Price-Fixing at the Ticket Window? 111

YOU’RE THE ECONOMIST Can Vouchers Fix Our Schools? 116

CHECKPOINT Should There Be a War on Drugs? 118

APPENDIX TO CHAPTER 4

Applying Supply and Demand Analysis to Health Care 125

The Impact of Health Insurance 125

Shifts in the Demand for Health Care 127

Shifts in the Supply of Health Care 128

CHAPTER 5

Price Elasticity of Demand and Supply 129

Price Elasticity of Demand 130

Price Elasticity of Demand Variations Along a Demand Curve 135

CHECKPOINT Will Fliers Flock to Low Summer Fares? 138

Determinants of Price Elasticity of Demand 138

CHECKPOINT Can Trade Sanctions Affect Elasticity of Demand for Cars? 139

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CONTENTS ix

YOU’RE THE ECONOMIST Cigarette Smoking Price Elasticity of Demand 140

Other Elasticity Measures 141

CHECKPOINT Can Honda Compete with Itself? 146

CHAPTER 6

Consumer Choice Theory 153

From Utility to the Law of Demand 154

YOU’RE THE ECONOMIST Why is Water Less Expensive than Diamonds? 156

CHECKPOINT When Dining Out, Do You Eat Smart? 159

Income and Substitution Effects and the Law of Demand 160

YOU’RE THE ECONOMIST Testing the Law of Demand with White Rats 161

CHECKPOINT Does the Substitution Effect Apply to Buying a Car? 162

APPENDIX TO CHAPTER 6

Indifference Curve Analysis 168

Constructing an Indifference Curve 168

Why Indifference Curves Are Downward-Sloping and Convex 168

The Indifference Map 170

The Budget Line 171

A Consumer Equilibrium Graph 173

Derivation of the Demand Curve 174

CHAPTER 7

Production Costs 181

Costs and Profi t 182

CHECKPOINT Should the Professor Go or Stay? 184

Short-Run Production Costs 184

Short-Run Cost Formulas 187

Marginal Cost Relationships 191

CHECKPOINT Did Michael Jordan Beat the Marginal-Average Rule? 193

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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.