Description: (NOTE: Each chapter ends with Summary, Questions for Review and Exercises.) I. INTRODUCTION: MARKETS AND PRICES. 1. Preliminaries. The Use and Limitations of Microeconomic Theory. Positive Versus Normative Analysis. Why Study Microeconomics? What Is a Market? Real Versus Nominal Prices. 2. The Basics of Supply and Demand. The Market Mechanism. Shifts in Supply and Demand. Elasticities of Supply and Demand. Short-Run Versus Long-Run Elasticities. Understanding and Predicting the Effects of Changing Market Conditions. Effects of Government Intervention-Price Controls. II. PRODUCERS, CONSUMERS, AND COMPETITIVE MARKETS. 3. Consumer Behavior. Consumer Preferences. Budget Constraints. Consumer Choice. Revealed Preference. The Concept of Utility. Cost-of-Living Indexes. 4. Individual and Market Demand. Individual Demand. Income and Substitution Effects. Market Demand. Consumer Surplus. Network Externalities. Empirical Estimation of Demand. 5. Choice Under Uncertainty. Describing Risk. Preferences Toward Risk. Reducing Risk. The Demand for Risky Assets. 6. Production. The Technology of Production. Isoquants. Production with One Variable Input (Labor). Production with Two Variable Inputs. Returns to Scale.' 7. The Cost of Production. Measuring Cost: Which Costs Matter? Cost in the Short Run. Cost in the Long Run. Long-Run Versus Short-Run Cost Curves. Production With Two Outputs-Economies of Scope. Dynamic Changes in Costs-The Learning Curve. Estimating and Predicting Cost. 8. Profit Maximization and Competitive Supply. Profit Maximization. Marginal Revenue, Marginal Cost, and Profit Maximization. Choosing Output in the Short Run. The Competitive Firm''s Short-Run Supply Curve. The Short-Run Market Supply Curve. Choosing Output in the Long Run. The Industry''s Long-Run Supply Curve. Perfectly Competitive Markets. 9. The Analysis of Competitive Markets. Evaluating the Gains and Losses from Government Policies-Consumer and Producer Surplus. The Efficiency of a Competitive Market. Minimum Prices. Price Supports and Production Quotas. Import Quotas and Tariffs. The Impact of a Tax or Subsidy. III. MARKET STRUCTURE AND COMPETITIVE STRATEGY. 10. Market Power: Monopoly and Monopsony. Monopoly. Monopoly Power. Sources of Monopoly Power. The Social Costs of Monopoly Power. Monopsony. Monopsony Power. Limiting Market Power: The Antitrust Laws. 11. Pricing with Market Power. Capturing Consumer Surplus. Price Discrimination. Intertemporal Price Discrimination and Peak-Load Pricing. The Two-Part Tariff. Bundling. Advertising. 12. Monopolistic Competition and Oligopoly. Monopolistic Competition. Oligopoly. First Mover Advantage-The Stackelberg Model. Price Competition. Competition Versus Collusion: The Prisoners'' Dilemma. Implications of the Prisoners'' Dilemma for Oligopolistic Pricing. Cartels. 13. Game Theory and Competitive Strategy. Gaming and Strategic Decisions. Dominant Strategies. The Nash Equilibrium Revisited. Repeated Games. Sequential Games. Threats, Commitments, and Credibility. Entry Deterrence. Bargaining Strategy. 14. Markets for Factor Inputs. Competitive Factor Markets. Equilibrium in a Competitive Factor Market. Factor Markets with Monopsony Power. Factor Markets with Monopoly Power. 15. Investment, Time, and Capital Markets. Stocks Versus Flows. Present Discounted Value. The Value of a Bond. The Net Present Value Criterion for Capital Investment Decisions. Adjustments for Risk. Investment Decisions by Consumers. Intertemporal Production Decisions-Depletable Resources. How Are Interest Rates Determined? IV. INFORMATION, MARKET FAILURE, AND THE ROLE OF GOVERNMENT. 16. General Equilibrium and Economic Efficiency. General Equilibrium Analysis. Efficiency in Exchange. Equity and Efficiency. Efficiency in Production. The Gains from Free Trade. An Overview-The Efficiency of Competitive Markets. Why Markets Fail. 17. Markets with Asymmetric Information. Quality Uncertainty and the Market for Lemons. Market Signaling. Moral Hazard. The Principal-Agent Problem. Managerial Incentives in an Integrated Firm. Asymmetric Information in Labor Markets: Efficiency Wage Theory. 18. Externalities and Public Goods. Externalities. Ways of Correcting Market Failure. Externalities and Property Rights. Common Property Resources. Public Goods. Private Preferences for Public Goods. Appendix. The Basics of Regression. Glossary. Answers to Selected Exercises. Index. List of Examples.

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