Microeconomic Theory: Basic Principles & Extensions

Höfundar: Walter Nicholson; Christopher M. Snyder (Útgáfa: 13)
Microeconomic Theory: Basic Principles & Extensions

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Now you can truly understand and apply the latest economic models as you work directly with theoretical tools, real-world applications and popular new behavioral economics in this reader-friendly, market-leading book. Nicholson/Snyder’s “Microeconomic Theory: Basic Principles & Extensions” 13th Edition, takes a calculus-based approach to provide the ideal level of mathematical rigor, whether you are an upper-level undergraduate or beginning graduate student.

Insightful graphic presentations help you visually grasp the connections between the calculus and the algebraic and geometric approach to the same material. End-of-chapter problems present simple numerical/mathematical exercises, which strengthen your microeconomic intuition and are followed by more analytical, theoretical, behavioral and complex problems. The text closely connects all theory to real applications in the world today.

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Útgefandi
Cengage Learning US
ISBN
9798214048352
Print ISBN
9780357929384
Format
ePub
Útgáfa
13
Höfundar
Walter Nicholson; Christopher M. Snyder
Tungumál
English
Útgefið
2025-05-02
Prent takmörkun á líftíma
100
Prent takmörkun
2
Afritunar takmörkun
2
Flokkar
Hagfræði

Kaflar

  • Cover Page
  • Title Page
  • Copyright Page
  • Dedication
  • About the Authors
  • Preface
  • Part 1. Introduction
  • Chapter 1. Economic Models
  • 1-1. Theoretical Models
  • 1-2. Verification of Economic Models
  • 1-2a. The profit-maximization model
  • 1-2b. Testing assumptions
  • 1-2c. Testing predictions
  • 1-2d. Importance of empirical analysis
  • 1-3. General Features of Economic Models
  • 1-3a. The ceteris paribus assumption
  • 1-4. Structure of Economic Models
  • 1-4a. Optimization assumptions
  • 1-4b. Positive-normative distinction
  • 1-5. Development of the Economic Theory of Value
  • 1-5a. Early economic thoughts on value
  • 1-5b. The founding of modern economics
  • 1-5c. Labor theory of exchange value
  • 1-5d. The marginalist revolution
  • 1-5e. Marshallian supply–demand synthesis
  • 1-5f. Paradox resolved
  • 1-5g. General equilibrium models
  • 1-5h. Production possibility frontier
  • 1-5i. Welfare economics
  • 1-6. Modern Developments
  • 1-6a. The mathematical foundations of economic models
  • 1-6b. New tools for studying markets
  • 1-6c. The economics of uncertainty and information
  • 1-6d. Behavioral economics
  • 1-6e. Computers and empirical analysis
  • Summary
  • Suggestions for Further Reading
  • Chapter 2. Mathematics for Microeconomics
  • 2-1. Maximization of a Function of One Variable
  • 2-1a. Derivatives
  • 2-1b. Value of the derivative at a point
  • 2-1c. First-order condition for a maximum
  • 2-1d. Second-order conditions
  • 2-1e. Second derivatives
  • 2-1f. Rules for finding derivatives
  • 2-2. Functions of Several Variables
  • 2-2a. Partial derivatives
  • 2-2b. Calculating partial derivatives
  • 2-2c. Partial derivatives and the ceteris paribus assumption
  • 2-2d. Partial derivatives and units of measurement
  • 2-2e. Elasticity—a general definition
  • 2-2f. Second-order partial derivatives
  • 2-2g. Young’s theorem
  • 2-2h. Uses of second-order partials
  • 2-2i. The chain rule with many variables
  • 2-2j. Implicit functions
  • 2-2k. A special case—comparative statics analysis
  • 2-3. Maximization of Functions of Several Variables
  • 2-3a. First-order conditions for a maximum
  • 2-3b. Second-order conditions
  • 2-4. The Envelope Theorem
  • 2-4a. A specific example
  • 2-4b. A direct, time-consuming approach
  • 2-4c. The envelope shortcut
  • 2-4d. Many-variable case
  • 2-5. Constrained Maximization
  • 2-5a. Lagrange multiplier method
  • 2-5b. The formal problem
  • 2-5c. First-order conditions
  • 2-5d. Interpretation of the Lagrange multiplier
  • 2-5e. Lagrange multiplier as a benefit–cost ratio
  • 2-5f. Duality
  • 2-6. Envelope Theorem in Constrained Maximization Problems
  • 2-7. Inequality Constraints
  • 2-7a. A two-variable example
  • 2-7b. Slack variables
  • 2-7c. Solution using Lagrange multipliers
  • 2-7d. Complementary slackness
  • 2-8. Second-Order Conditions and Curvature
  • 2-8a. Functions of one variable
  • 2-8b. Functions of two variables
  • 2-8c. An intuitive argument
  • 2-8d. A formal analysis
  • 2-8e. Concave functions
  • 2-8f. Constrained maximization
  • 2-8g. Quasiconcave functions
  • 2-9. Homogeneous Functions
  • 2-9a. Homogeneity and derivatives
  • 2-9b. Euler’s theorem
  • 2-9c. Homothetic functions
  • 2-10. Integration
  • 2-10a. Antiderivatives
  • 2-10b. Calculating antiderivatives
  • 2-10c. Definite integrals
  • 2-10d. Fundamental theorem of calculus
  • 2-10e. Differentiating a definite integral
  • 2-11. Dynamic Optimization
  • 2-11a. The optimal control problem
  • 2-11b. The maximum principle
  • 2-12. Mathematical Statistics
  • 2-12a. Random variables and probability density functions
  • 2-12b. Discrete and continuous random variables
  • 2-12c. Probability density functions
  • 2-12d. A few important PDFs
  • 2-12e. Expected value
  • 2-12f. Variance and standard deviation
  • 2-12g. Covariance
  • 2-13. Vectors and Matrices
  • 2-13a. Vector notation
  • 2-13b. Matrix notation
  • 2-13c. Matrix terminology
  • 2-14. Second-Order Conditions in Matrix Notation
  • 2-14a. Cobb–Douglas example
  • 2-14b. Second-order conditions with a linear constraint
  • 2-14c. Fence example reconsidered
  • 2-14d. Quasiconcavity
  • 2-15. Matrices and Simultaneous Equations
  • 2-15a. Cramer’s rule
  • 2-16. Comparative Statics with Two Endogenous Variables
  • 2-16a. Matrix representation
  • 2-16b. Using Cramer’s rule
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Part 2. Choice and Demand
  • Chapter 3. Preferences and Utility
  • 3-1. Axioms of Rational Choice
  • 3-2. Utility
  • 3-2a. Nonuniqueness of utility measures
  • 3-2b. The ceteris paribus assumption
  • 3-2c. Utility from consumption of goods
  • 3-2d. Arguments of utility functions
  • 3-2e. Economic goods
  • 3-3. Trades and Substitution
  • 3-3a. Indifference curves and the marginal rate of substitution
  • 3-3b. Indifference curve map
  • 3-3c. Indifference curves and transitivity
  • 3-3d. Convexity of indifference curves
  • 3-3e. Convexity and balance in consumption
  • 3-4. The Mathematics of Indifference Curves
  • 3-4a. The marginal rate of substitution
  • 3-4b. Convexity of indifference curves
  • 3-5. Utility Functions for Specific Preferences
  • 3-5a. Cobb–Douglas utility
  • 3-5b. Perfect substitutes
  • 3-5c. Perfect complements
  • 3-5d. CES utility
  • 3-6. The Many-Good Case
  • 3-6a. The MRS with many goods
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Special Preferences
  • References
  • Chapter 4. Utility Maximization and Choice
  • 4-1. An Initial Survey
  • 4-1a. A numerical illustration
  • 4-2. The Two-Good Case: A Graphical Analysis
  • 4-2a. Budget constraint
  • 4-2b. First-order conditions for a maximum
  • 4-2c. Second-order conditions for a maximum
  • 4-2d. Corner solutions
  • 4-3. The n -Good Case
  • 4-3a. First-order conditions
  • 4-3b. Implications of first-order conditions
  • 4-3c. Interpreting the Lagrange multiplier
  • 4-3d. Corner solutions
  • 4-4. Indirect Utility Function
  • 4-5. The Lump Sum Principle
  • 4-6. Expenditure Minimization
  • 4-6a. A mathematical statement
  • 4-7. Properties of Expenditure Functions
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Budget Shares
  • References
  • Chapter 5. Income and Substitution Effects
  • 5-1. Demand Functions
  • 5-1a. Homogeneity
  • 5-2. Changes in Income
  • 5-2a. Normal and inferior goods
  • 5-3. Changes in a Good’s Price
  • 5-3a. Graphical analysis of a decrease in price
  • 5-3b. Graphical analysis of an increase in price
  • 5-3c. Effects of price changes for inferior goods
  • 5-3d. Giffen’s paradox
  • 5-3e. A summary
  • 5-4. The Individual’s Demand Curve
  • 5-4a. Shifts in the demand curve
  • 5-5. Compensated (Hicksian) Demand Curves and Functions
  • 5-5a. Shephard’s lemma
  • 5-5b. Relationship between compensated and uncompensated demand curves
  • 5-6. A Mathematical Development of Response to Price Changes
  • 5-6a. Direct approach
  • 5-6b. Indirect approach
  • 5-6c. The substitution effect
  • 5-6d. The income effect
  • 5-6e. The Slutsky equation
  • 5-6f. Final form of the Slutsky equation
  • 5-6g. Using the Slutsky equation to recover compensated demand
  • 5-6h. Roy’s identity and the recovery of Marshallian demand functions
  • 5-7. Demand Elasticities
  • 5-7a. Marshallian demand elasticities
  • 5-7b. Price elasticity of demand
  • 5-7c. Price elasticity and total spending
  • 5-7d. Compensated price elasticities
  • 5-7e. Relationships among demand elasticities
  • 5-8. Consumer Surplus
  • 5-8a. Consumer welfare and the expenditure function
  • 5-8b. Using the compensated demand curve to show CV
  • 5-8c. The consumer surplus concept
  • 5-8d. Welfare changes and the Marshallian demand curve
  • 5-9. Weak Axiom of Revealed Preference
  • 5-9a. Graphical approach
  • 5-9b. WARP and the substitution effect
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Demand Concepts and The Evaluation of Price Indices
  • References
  • Chapter 6. Demand Relationships among Goods
  • 6-1. The Two-Good Case
  • 6-1a. A mathematical treatment
  • 6-2. Substitutes and Complements
  • 6-2a. Gross (Marshallian) substitutes and complements
  • 6-2b. Asymmetry of the gross definitions
  • 6-3. Net (Hicksian) Substitutes and Complements
  • 6-3a. Proof of the symmetry of cross-price substitution effects
  • 6-3b. The substitution matrix
  • 6-3c. Estimating the substitution matrix
  • 6-4. Substitutability with Many Goods
  • 6-5. Composite Commodities
  • 6-5a. Composite commodity theorem
  • 6-5b. Generalizations and limitations
  • 6-6. Attributes Models
  • 6-6a. Household production
  • 6-6b. The linear attributes model
  • 6-6c. Illustrating the budget constraints
  • 6-6d. Corner solutions
  • 6-6e. Market goods as attribute bundles
  • 6-6f. Hedonic prices
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Simplifying Demand and Two-Stage Budgeting
  • References
  • Part 3. Uncertainty and Strategy
  • Chapter 7. Uncertainty
  • 7-1. Mathematical Statistics
  • 7-1a. Defining probability
  • 7-2. Fair Gambles and the Expected Utility Hypothesis
  • 7-2a. St. Petersburg paradox
  • 7-3. Expected Utility
  • 7-4. The von Neumann–Morgenstern Theorem
  • 7-4a. The von Neumann–Morgenstern utility index
  • 7-4b. Expected utility maximization
  • 7-5. Risk Aversion
  • 7-5a. Risk aversion and fair gambles
  • 7-5b. Risk aversion and insurance
  • 7-6. Measuring Risk Aversion
  • 7-6a. Risk aversion and insurance premiums
  • 7-6b. Risk aversion and wealth
  • 7-6c. Relative risk aversion
  • 7-7. Methods for Reducing Uncertainty and Risk
  • 7-8. Insurance
  • 7-9. Diversification
  • 7-10. Flexibility
  • 7-10a. Types of options
  • 7-10b. Modeling a real option
  • 7-10c. Option value of delay
  • 7-11. Information
  • 7-11a. Information as a good
  • 7-11b. Quantifying the value of information
  • 7-12. Asymmetry of Information
  • 7-13. The State-Preference Approach to Choice Under Uncertainty
  • 7-13a. States of the world and contingent commodities
  • 7-13b. Utility analysis
  • 7-13c. Prices of contingent commodities
  • 7-13d. Fair markets for contingent goods
  • 7-13e. Risk aversion
  • 7-13f. A graphic analysis
  • 7-13g. Risk aversion and risk premiums
  • 7-14. Behavioral Issues and Uncertainty
  • 7-14a. Preferences in uncertain situations
  • 7-14b. Subjective probabilities
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Financial Economics
  • References
  • Chapter 8. Game Theory
  • 8-1. Basic Concepts
  • 8-1a. Players
  • 8-1b. Strategies
  • 8-1c. Payoffs
  • 8-2. Prisoners’ Dilemma
  • 8-2a. Normal form
  • 8-2b. Thinking strategically about the Prisoners’ Dilemma
  • 8-3. Nash Equilibrium
  • 8-3a. A formal definition
  • 8-3b. Nash equilibrium in the Prisoners’ Dilemma
  • 8-3c. Underlining best-response payoffs
  • 8-3d. Dominant strategies
  • 8-3e. A coordination game
  • 8-4. Mixed Strategies
  • 8-4a. Formal definitions
  • 8-4b. Computing mixed-strategy equilibria
  • 8-5. Existence of Equilibrium
  • 8-6. Continuum of Actions
  • 8-6a. Tragedy of the Commons
  • 8-7. Sequential Games
  • 8-7a. Sequential Group Science Project
  • 8-7b. Extensive form
  • 8-7c. Nash equilibria
  • 8-7d. Subgame-perfect equilibrium
  • 8-7e. Backward induction
  • 8-8. Repeated Games
  • 8-8a. Finitely repeated games
  • 8-8b. Infinitely repeated games
  • 8-9. Incomplete Information
  • 8-10. Simultaneous Bayesian Games
  • 8-10a. Player types and beliefs
  • 8-10b. Bayesian–Nash equilibrium
  • 8-11. Signaling Games
  • 8-11a. Job-market signaling
  • 8-11b. Bayes’ rule
  • 8-11c. Perfect Bayesian equilibrium
  • 8-12. Experimental Games
  • 8-12a. Experiments with the Prisoners’ Dilemma
  • 8-12b. Experiments with the Ultimatum Game
  • 8-12c. Experiments with the Dictator Game
  • 8-13. Evolutionary Games and Learning
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Existence of Nash Equilibrium
  • References
  • Part 4. Production and Supply
  • Chapter 9. Production Functions
  • 9-1. Marginal Productivity
  • 9-1a. Marginal physical product
  • 9-1b. Diminishing marginal productivity
  • 9-1c. Average productivity
  • 9-2. Isoquant Maps and the Rate of Technical Substitution
  • 9-2a. The marginal rate of technical substitution (RTS)
  • 9-2b. RTS and marginal productivities
  • 9-2c. Reasons for a diminishing RTS
  • 9-2d. Importance of cross-productivity effects
  • 9-3. Returns to Scale
  • 9-3a. Constant returns to scale
  • 9-3b. Homothetic production functions
  • 9-3c. The n -input case
  • 9-4. The Elasticity of Substitution
  • 9-4a. The n -input case
  • 9-5. Four Simple Production Functions
  • 9-5a. Case 1: Linear ( σ = ∞ )
  • 9-5b. Case 2: Fixed proportions ( σ = 0 )
  • 9-5c. Case 3: Cobb–Douglas ( σ = 1 )
  • 9-5d. Case 4: CES production function
  • 9-6. Technical Progress
  • 9-6a. Measuring technical progress
  • 9-6b. Growth accounting
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Many-Input Production Functions
  • References
  • Chapter 10. Cost Functions
  • 10-1. Definitions of Costs
  • 10-1a. Labor costs
  • 10-1b. Capital costs
  • 10-1c. Costs of entrepreneurial services
  • 10-1d. Economic costs
  • 10-1e. Simplifying assumptions
  • 10-2. Relationship Between Profit Maximization and Cost Minimization
  • 10-3. Cost-Minimizing Input Choices
  • 10-3a. Mathematical analysis
  • 10-3b. Further interpretations
  • 10-3c. Graphical analysis
  • 10-3d. Contingent demand for inputs
  • 10-3e. Firm’s expansion path
  • 10-4. Cost Functions
  • 10-4a. Average and marginal cost functions
  • 10-4b. Graphical analysis of total costs
  • 10-4c. Graphical analysis of average and marginal costs
  • 10-5. Shifts in Cost Curves
  • 10-5a. Properties of cost functions
  • 10-5b. Input substitution
  • 10-5c. Substitution with many inputs
  • 10-5d. Quantitative size of shifts in cost curves
  • 10-5e. Technical change
  • 10-5f. Contingent demand for inputs and Shephard’s lemma
  • 10-5g. Shephard’s lemma and the elasticity of substitution
  • 10-6. Short-Run, Long-Run Distinction
  • 10-6a. Short-run total costs
  • 10-6b. Fixed and variable costs
  • 10-6c. Nonoptimality of short-run costs
  • 10-6d. Short-run marginal and average costs
  • 10-6e. Relationship between short-run and long-run cost curves
  • 10-6f. Graphs of per-unit cost curves
  • 10-6g. Practical examples of fixed costs
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. The Translog Cost Function
  • References
  • Chapter 11. Profit Maximization
  • 11-1. The Nature and Behavior of Firms
  • 11-1a. Simple model of a firm
  • 11-1b. Complicating factors
  • 11-1c. Relationship to consumer theory
  • 11-2. Profit Maximization
  • 11-2a. Profit maximization and marginalism
  • 11-2b. Output choice
  • 11-2c. Second-order conditions
  • 11-2d. Graphical analysis
  • 11-3. Marginal Revenue
  • 11-3a. Marginal revenue and elasticity
  • 11-3b. Price–marginal cost markup
  • 11-3c. Marginal revenue curve
  • 11-4. Short-Run Supply by a Price-Taking Firm
  • 11-4a. Profit-maximizing decision
  • 11-4b. The firm’s short-run supply curve
  • 11-4c. The shutdown decision
  • 11-5. Profit Functions
  • 11-5a. Properties of the profit function
  • 11-5b. Envelope results
  • 11-5c. Producer surplus in the short run
  • 11-6. Profit Maximization and Input Demand
  • 11-6a. Second-order conditions
  • 11-6b. Input demand functions
  • 11-6c. Single-input case
  • 11-6d. Two-input case
  • 11-6e. Substitution effect
  • 11-6f. Output effect
  • 11-6g. Cross-price effects
  • 11-6h. A summary of substitution and output effects
  • 11-6i. A mathematical development
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Boundaries of the Firm
  • References
  • Part 5. Competitive Markets
  • Chapter 12. The Partial Equilibrium Competitive Model
  • 12-1. Market Demand
  • 12-1a. The market demand curve
  • 12-1b. Shifts in the market demand curve
  • 12-1c. Generalizations
  • 12-1d. A simplified notation
  • 12-1e. Elasticity of market demand
  • 12-2. Timing of the Supply Response
  • 12-3. Pricing in the Very Short Run
  • 12-4. Short-Run Price Determination
  • 12-4a. Short-run market supply curve
  • 12-4b. Short-run market supply
  • 12-4c. Short-run supply elasticity
  • 12-4d. Equilibrium price determination
  • 12-4e. Market reaction to a shift in demand
  • 12-5. Shifts in Supply and Demand Curves: A Graphical Analysis
  • 12-5a. Shifts in supply curves: Importance of the shape of the demand curve
  • 12-5b. Shifts in demand curves: Importance of the shape of the supply curve
  • 12-6. A Comparative Statics Model of Market Equilibrium
  • 12-6a. An elasticity interpretation
  • 12-6b. The structure of equilibrium models
  • 12-7. Long-Run Analysis
  • 12-7a. Equilibrium conditions
  • 12-8. Long-Run Equilibrium: Constant Cost Case
  • 12-8a. Initial equilibrium
  • 12-8b. Responses to an increase in demand
  • 12-8c. Infinitely elastic supply
  • 12-9. Shape of the Long-Run Supply Curve
  • 12-9a. Increasing cost industry
  • 12-9b. Decreasing cost industry
  • 12-9c. Classification of long-run supply curves
  • 12-10. Long-Run Elasticity of Supply
  • 12-10a. Empirical estimates
  • 12-11. Comparative Statics Analysis of Long-Run Equilibrium
  • 12-11a. Industry structure
  • 12-11b. Shifts in demand
  • 12-11c. Changes in input costs
  • 12-12. Producer Surplus in the Long Run
  • 12-12a. Ricardian rent
  • 12-12b. Capitalization of rents
  • 12-12c. Input supply and long-run producer surplus
  • 12-13. Economic Efficiency and Applied Welfare Analysis
  • 12-13a. A graphical proof
  • 12-13b. A mathematical proof
  • 12-13c. Applied welfare analysis
  • 12-14. Price Controls and Shortages
  • 12-14a. Welfare evaluation
  • 12-14b. Disequilibrium behavior
  • 12-15. Tax Incidence Analysis
  • 12-15a. A comparative statics model of tax incidence
  • 12-15b. A welfare analysis
  • 12-15c. Deadweight loss and elasticity
  • 12-15d. Subsidies
  • 12-15e. Transaction costs
  • 12-15f. Effects on the attributes of transactions
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Demand Aggregation and Estimation
  • References
  • Chapter 13. General Equilibrium and Welfare
  • 13-1. Perfectly Competitive Price System
  • 13-1a. The law of one price
  • 13-1b. Behavioral assumptions
  • 13-2. A Graphical Model of General Equilibrium with Two Goods
  • 13-2a. General equilibrium demand
  • 13-2b. General equilibrium supply
  • 13-2c. Edgeworth box diagram for production
  • 13-2d. Efficient allocations
  • 13-2e. Production possibility frontier
  • 13-2f. Rate of product transformation
  • 13-2g. A mathematical derivation
  • 13-2h. Opportunity cost and supply
  • 13-2i. Determination of equilibrium prices
  • 13-3. Comparative Statics Analysis
  • 13-4. General Equilibrium Modeling and Factor Prices
  • 13-4a. The Corn Laws debate
  • 13-4b. Trade and factor prices
  • 13-4c. Political support for trade policies
  • 13-5. A Mathematical Model of Exchange
  • 13-5a. Vector notation
  • 13-5b. Utility, initial endowments, and budget constraints
  • 13-5c. Demand functions and homogeneity
  • 13-5d. Equilibrium and Walras’ law
  • 13-5e. Existence of equilibrium in the exchange model
  • 13-5f. Uniqueness and Stability
  • 13-5g. First theorem of welfare economics
  • 13-5h. A graphic illustration of the first theorem
  • 13-5i. Second theorem of welfare economics
  • 13-5j. Social welfare functions
  • 13-6. A Mathematical Model of Production and Exchange
  • 13-6a. Budget constraints and Walras’ law
  • 13-6b. Walrasian equilibrium
  • 13-6c. Welfare economics in the Walrasian model with production
  • 13-7. Computable General Equilibrium Models
  • 13-7a. Structure of general equilibrium models
  • 13-7b. Solving general equilibrium models
  • 13-7c. Economic insights from general equilibrium models
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Computable General Equilibrium Models
  • References
  • Part 6. Market Power
  • Chapter 14. Monopoly
  • 14-1. Barriers to Entry
  • 14-1a. Technical barriers
  • 14-1b. Legal barriers
  • 14-1c. Barriers erected by the monopolist
  • 14-2. Profit Maximization and Output Choice
  • 14-2a. The inverse elasticity rule, again
  • 14-2b. Monopoly profits
  • 14-2c. There is no monopoly supply curve
  • 14-3. Misallocated Resources Under Monopoly
  • 14-3a. Basis of comparison
  • 14-3b. A graphical analysis
  • 14-4. Comparative Statics analysis of Monopoly
  • 14-5. Monopoly Product Quality
  • 14-5a. A formal treatment of quality
  • 14-5b. Product durability
  • 14-6. Price Discrimination
  • 14-6a. Perfect price discrimination
  • 14-6b. Price discrimination across segmented markets
  • 14-7. Price Discrimination through Non-Uniform Schedules
  • 14-7a. Two-part tariffs
  • 14-7b. Dynamic price discrimination and the Coase conjecture
  • 14-8. Regulation of Monopoly
  • 14-8a. Marginal cost pricing and the natural monopoly dilemma
  • 14-8b. Two-tier pricing systems
  • 14-8c. Rate of return regulation
  • 14-8d. A formal model
  • 14-9. Dynamic views of Monopoly
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Optimal Linear Two-Part Tariffs
  • References
  • Chapter 15. Imperfect Competition
  • 15-1. Short-Run Decisions: Pricing and Output
  • 15-2. Bertrand Model
  • 15-2a. Nash equilibrium of the Bertrand game
  • 15-2b. Bertrand paradox
  • 15-3. Cournot Model
  • 15-3a. Nash equilibrium of the Cournot game
  • 15-3b. Varying the number of Cournot firms
  • 15-3c. Prices or quantities?
  • 15-4. Capacity Constraints
  • 15-5. Product Differentiation
  • 15-5a. Meaning of “the market”
  • 15-5b. Bertrand competition with differentiated products
  • 15-5c. Consumer search and price dispersion
  • 15-6. Tacit Collusion
  • 15-6a. Finitely repeated game
  • 15-6b. Infinitely repeated game
  • 15-7. Longer-Run Decisions: Investment, Entry, and Exit
  • 15-7a. Flexibility versus commitment
  • 15-7b. Sunk costs
  • 15-7c. First-mover advantage in the Stackelberg model
  • 15-7d. Contrast with price leadership
  • 15-8. Strategic Entry Deterrence
  • 15-9. Signaling
  • 15-9a. Entry-deterrence model
  • 15-9b. Separating equilibrium
  • 15-9c. Pooling equilibrium
  • 15-9d. Predatory pricing
  • 15-10. How Many Firms Enter?
  • 15-10a. Barriers to entry
  • 15-10b. Long-run equilibrium
  • 15-10c. Feedback effect
  • 15-11. Innovation
  • 15-11a. Monopoly on innovation
  • 15-11b. Competition for innovation
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Strategic Substitutes and Complements
  • References
  • Part 7. Pricing in Input Markets
  • Chapter 16. Labor Markets
  • 16-1. Allocation of Time
  • 16-1a. Simple two-good model
  • 16-1b. Utility maximization
  • 16-1c. Income and substitution effects of a change in w
  • 16-1d. A graphical analysis
  • 16-2. A Mathematical Analysis of Labor Supply
  • 16-2a. Dual to the labor supply problem
  • 16-2b. Slutsky equation for labor supply
  • 16-3. Market Supply Curve for Labor
  • 16-4. Labor Market Equilibrium
  • 16-5. Wage Variation
  • 16-5a. Human capital
  • 16-5b. Compensating wage differentials
  • 16-5c. Job search
  • 16-6. Monopsony in the Labor Market
  • 16-6a. Graphical analysis
  • 16-7. Labor Unions
  • 16-7a. Unions’ goals
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Chapter 17. Capital and Time
  • 17-1. Capital and the Rate of Return
  • 17-1a. Rate of return
  • 17-2. Determining the Rate of Return
  • 17-2a. Rate of return and price of future goods
  • 17-2b. Demand for future goods
  • 17-2c. Utility maximization
  • 17-2d. Effects of changes in r
  • 17-2e. Supply of future goods
  • 17-2f. Equilibrium price of future goods
  • 17-2g. The equilibrium rate of return
  • 17-2h. Rate of return, real interest rates, and nominal interest rates
  • 17-3. Consumption Theory of the Real Interest Rate
  • 17-3a. Optimal consumption
  • 17-3b. Determination of the real interest rate
  • 17-3c. Real interest rate paradox
  • 17-4. The Firm’s Demand for Capital
  • 17-4a. Determinants of market rental rates
  • 17-4b. Nondepreciating machines
  • 17-4c. Ownership of machines
  • 17-4d. Theory of investment
  • 17-5. Present Discounted Value Criterion
  • 17-5a. A simple case
  • 17-6. Natural Resource Pricing
  • 17-6a. Profit-maximizing pricing and output
  • 17-6b. Generalizing the model
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Appendix to Chapter 17. The Mathematics of Compound Interest
  • Part 8. Market Failure
  • Chapter 18. Asymmetric Information
  • 18-1. Complex Contracts as a Response to Asymmetric Information
  • 18-1a. Asymmetric information
  • 18-1b. The value of contracts
  • 18-2. Principal–Agent Model
  • 18-2a. Two leading models
  • 18-2b. First, second, and third best
  • 18-3. Hidden Actions
  • 18-4. Owner–Manager Relationship
  • 18-4a. First best (full-information case)
  • 18-4b. Second best (hidden-action case)
  • 18-4c. Comparison to standard model of the firm
  • 18-5. Moral Hazard in Insurance
  • 18-5a. Mathematical model
  • 18-5b. First-best insurance contract
  • 18-5c. Second-best insurance contract
  • 18-5d. Competitive insurance market
  • 18-6. Hidden Types
  • 18-7. Nonlinear Pricing
  • 18-7a. Mathematical model
  • 18-7b. First-best nonlinear pricing
  • 18-7c. Second-best nonlinear pricing
  • 18-8. Adverse Selection in Insurance
  • 18-8a. First best
  • 18-8b. Second best
  • 18-8c. Competitive insurance market
  • 18-9. Market Signaling
  • 18-9a. Signaling in competitive insurance markets
  • 18-9b. Market for lemons
  • 18-10. Auctions
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Using Experiments to Measure Asymmetric-Information Problems
  • References
  • Chapter 19. Externalities
  • 19-1. Defining Externalities
  • 19-1a. Externalities in production
  • 19-1b. Beneficial externalities
  • 19-1c. Externalities in consumption
  • 19-1d. Externalities from public goods
  • 19-2. Externalities and Allocative Inefficiency
  • 19-2a. Finding the efficient allocation
  • 19-2b. Inefficiency of the competitive allocation
  • 19-3. Solutions to Negative Externalities
  • 19-3a. Production quota
  • 19-3b. Pigovian tax
  • 19-3c. Taxation in the general-equilibrium model
  • 19-3d. Pollution rights market
  • 19-3e. The Coase theorem
  • 19-4. Externalities and Information
  • 19-4a. Weitzman Model
  • 19-4b. Second-best regulation
  • 19-5. Externalities and Time
  • 19-5a. Technological change
  • 19-5b. Time discounting
  • 19-6. Externalities and Equity
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Pollution Abatement with Multiple Firms
  • References
  • Chapter 20. Public Goods and Public Choice
  • 20-1. Attributes of Public Goods
  • 20-1a. Nonexcludability
  • 20-1b. Nonrivalry
  • 20-1c. Typology of public goods
  • 20-2. Public Goods and Resource Allocation
  • 20-2a. Failure of a competitive market
  • 20-2b. Inefficiency of a Nash equilibrium
  • 20-3. Lindahl Pricing of Public Goods
  • 20-3a. Shortcomings of the Lindahl solution
  • 20-3b. Local public goods
  • 20-4. Voting and Resource Allocation
  • 20-4b. Majority rule
  • 20-4b. The paradox of voting
  • 20-4c. Single-peaked preferences and the median voter theorem
  • 20-5. A Political Model of Government Spending
  • 20-5a. The median voter equilibrium
  • 20-5b. Optimality of the median voter result
  • 20-6. Voting Mechanisms
  • 20-6a. The Groves mechanism
  • 20-6b. The Clarke mechanism
  • 20-6c. Generalizations
  • Summary
  • Problems
  • Suggestions for Further Reading
  • Extensions. Public Debt
  • References