Transcription
Microeconomics8theditionJeffrey M. PerloffUniversity of California, BerkeleyPearsonNew York, NY
ContentsChapter 1 Introduction1.11.21.3Microeconomics: The Allocation of ScarceResourcesTrade-OffsWho Makes the DecisionsPrices Determine AllocationsAPPLICATION Twinkie TaxModelsAPPLICATION Income Tbresbold Modeland ChinaSimplifications by AssumptionTesting TheoriesMaximizing Subject to ConstraintsPositive Versus NormativeUses of Microeconomic ModelsSummary 7Chapter 2 Supply and Demand2.12.22.32.42.5CHALLENGE Qwdnriries and Prices o/Genetically Modified FoodsDemandThe Demand CurveAPPLICATION Calorie CountingThe Demand FunctionSolved Problem 2.1Summing Demand CurvesAPPLICATION Aggregating ComDemand CurvesSupplyThe Supply CurveThe Supply FunctionSumming Supply CurvesHow Government Import Policies AffectSupply CurvesSolved Problem 2.2Market EquilibriumUsing a Graph to Determine the EquilibriumUsing Math to Determine the EquilibriumForces That Drive the Market to EquilibriumShocking the EquilibriumEffects of a Shock to the Supply CurveSolved Problem 2.3Effects of a Shock to the Demand CurveEffects of Government InterventionsPolicies That Shift Supply CurvesAPPLICATION Occupational Licensing11222233445572.6Chapter 3 Applying the 2121222323232526262728282828Solved Problem 2.4Policies That Cause the Quantity Demandedto Differ from the Quantity SuppliedAPPLICATION Venezuelan Price Ceilingsand ShortagesSolved Problem 2.5Why the Quantity Supplied Need Not Equalthe Quantity DemandedWhen to Use the Supply-and-Demand ModelCHALLENGE SOLUTION ßwawriri« andPrices of Genetically Modified FoodsSwtMfMdry 38 # Q«&srions 393.33.4CHALLENGE W&o Pdya f&e GAso/tneHow Shapes of Supply and DemandCurves MatterSensitiv!ty of the Quantity Demanded to PricePrice Elasticity of DemandSolved Problem 3.1APPLICATION The Demand Elasticitiesfor Google Play and Apple AppsElasticity Along the Demand CurveDemand Elasticity and RevenueSolved Problem 3.2APPLICATION Amazon PrimeDemand Elasticities over TimeOther Demand ElasticitiesAPPLICATION Anti-Smoking PoliciesMay Reduce Drunk DrivingSensitivity of the Quantity Suppliedto PriceElasticity of SupplyElasticity Along the Supply CurveSupply Elasticities over TimeAPPLICATION Oil Drilling in the ArcticNational Wildlife RefugeSolved Problem 3.3Effects of a Sales TaxEffects of a Specific Tax on the EquilibriumThe Equilibrium Is the Same No MatterWhom the Government TaxesSolved Problem 3.4Firms and Customers Share the Bürdenof the TaxAPPLICATION Taxes to Prevent 45455565657585960616163
ContentsSolved Problem 3.5Ad Valorem and Specific Taxes HaveSimilar EffectsSolved Problem 3.6SubsidiesAPPLICATION Subsidizing EthanolCHALLENGE SOLUTION WAo fays fAeGasoline Tax?Summary 68 Questions 69Chapter 4 Consumer ChoiceCHALLENGE W&y AtMericaMS Bwy MoreEbooks Than Do Germans4.1 PreferencesProperties of Consumer PreferencesAPPLICATION You Can't Have TooMuch MoneyPreference MapsSolved Problem 4.1APPLICATION Indifference CurvesBetween Food and Clothing4.2 UtilityUtility FunctionOrdinal PreferencesUtility and Indifference CurvesMarginal UtilityUtility and Marginal Rates of Substitution4.3 Budget ConstraintSlope of the Budget ConstraintSolved Problem 4.2Effect of a Change in Price on theOpportunity SetEffect of a Change in Income on theOpportunity SetSolved Problem 4.34.4 Constrained Consumer ChoiceThe Consumer's Optimal BündleAPPLICATION Substituting Alcohol forMarijuanaSolved Problem 4.4Solved Problem 4.5 Optimal Bundles on Convex Sections ofIndifference CurvesBuying Where More Is BetterFood StampsAPPLICATION Benefiting fromFood Stamps4.5 Behavioral EconomicsTests of TransitivityEndowment EffectAPPLICATION Opt In Versus Opt OutSalience and Bounded RationalityAPPLICATION Unaware of TaxesCHALLENGE SOLUTION WAy AmencaMsBuy More Ebooks Than Do GermansSummary 105 Questions 10663Chapter 5 Applying Consumer Theory64656666CHALLENGE Per-Ffowr Versus Lump-SumChildcare Subsidies5.1 Deriving Demand CurvesIndifference Curves and a RotatingBudget LinePrice-Consumption CurveAPPLICATION Smoking Versus Eatingand PhoningThe Demand Curve Corresponds to thePrice-Consumption CurveSolved Problem 5.15.2 How Changes in Income Shift Demand CurvesEffects of a Rise in IncomeSolved Problem 5.2Consumer Theory and Income ElasticitiesAPPLICATION Fast-Food Engel Curve5.3 Effects of a Price ChangeIncome and Substitution Effects witha Normal GoodSolved Problem 5.3Solved Problem 5.4Income and Substitution Effects withan Inferior GoodSolved Problem 5.5 Compensating Variation and EquivalentVariationAPPLICATION What's Your Smart PhoneWorth to You?5.4 Cost-of-Living AdjustmentsInflation IndexesEffects of Inflation AdjustmentsAPPLICATION Paying Employees to Relocate5.5 Deriving Labor Supply CurvesLabor-Leisure ChoiceIncome and Substitution EffectsSolved Problem 5.6Shape of the Labor Supply CurveAPPLICATION Working After Winningthe LotteryIncome Tax Rates and Labor SupplyCHALLENGE SOLUTION Per-Hour VersusLump-Sum Childcare SubsidiesSummary 142 Questions 59596979898100101101101102103104104Chapter 6 Firms and Production6.1CHALLENGE More ProdwcTü/e WbrtersDüring DownturnsThe Ownership and Management of FirmsPrivate, Public, and Nonprofit FirmsAPPLICATION Chinese State-OwnedEnterprisesThe Ownership of For-Profit FirmsThe Management of FirmsWhat Owners 39141147147148148149149150150
ContentsVlll6.2ProductionProduction FunctionsVarying Inputs over Time6.3 Short-Run ProductionTotal ProductMarginal Product of LaborSolved Problem 6.1Average Product of LaborGraphing the Product CurvesLaw of Diminishing Marginal ReturnsAPPLICATION Malthus and the GreenRevolution6.4 Long-Run ProductionIsoquantsAPPLICATION A Semiconductor IntegratedCircuit IsoquantSubstituting InputsSolved Problem 6.26.5 Returns to ScaleConstant, Increasing, and Decreasing Returnsto ScaleSolved Problem 6.3APPLICATION Returns to Scale in VariousIndustriesVarying Returns to Scale6.6 Productivity and Technical ChangeRelative ProductivityInnovationsAPPLICATION Robots and the Food You EatAPPLICATION A Good Boss RaisesProductivityCHAITHON Lahor ProrfwcfwAyDüring DownturnsSummary 174 Questions 175Chapter 7 CostsiTechnology Choice at HomeVersus Abroad7.1 The Nature of CostsOpportunity CostsAPPLICATION The Opportunity Cost ofan MBASolved Problem 7.1Opportunity Cost of CapitalSunk Costs7.2 Short-Run CostsShort-Run Cost MeasuresAPPLICATION The Sharing Economyand the Short RunShort-Run Cost CurvesProduction Functions and the Shapeof Cost CurvesAPPLICATION A Beer Manufacturer'sShort-Run Cost CurvesEffects of Taxes on CostsSolved Problem 7.2Short-Run Cost ng-Run CostsAll Costs Are Avoidable in the Long RunMinimizing CostIsocost LineCombining Cost and Production InformationSolved Problem 7.3Factor Price ChangesSolved Problem 7.4The Long-Run Expansion Path and theLong-Run Cost FunctionSolved Problem 7.5The Shape of Long-Run Cost CurvesAPPLICATION 3D PrintingEstimating Cost Curves Versus IntrospectionLower Costs in the Long RunLong-Run Average Cost as the Envelopeof Short-Run Average Cost CurvesAPPLICATION A Beer Manufacturer'sLong-Run Cost CurvesAPPLICATION Should You Buy an Inkjetor a Laser PrinterfShort-Run and Long-Run Expansion PathsThe Learning CurveCost of Producing Multiple GoodsAPPLICATION Medical Economies of Scopes Technology Choiceat Home Versus AbroadSummary 215 Questions 216Chapter 8 Competitive Firms and MarketsCHAL i. The Rising Cost of KeepingOn Trucktn'8.1 Perfect CompetitionPrice TakingWhy the Firm's Demand Curve Is HorizontalDeviations from Perfect CompetitionDerivation of a Competitive Firm'sDemand CurveSolved Problem 8.1Why We Study Perfect Competition8.2 Profit MaximizationProfitTwo Decisions for Maximizing Profit8.3 Competition in the Short RunShort-Run Output DecisionSolved Problem 8.2Short-Run Shutdown DecisionAPPLICATION Fracking and ShutdownsSolved Problem 8.3Short-Run Firm Supply CurveShort-Run Market Supply CurveShort-Run Competitive EquilibriumSolved Problem 8.48.4 Competition in the Long RunLong-Run Competitive ProfitMaximizationLong-Run Firm Supply 7227229231232234235237238238238241242243243244
APPLICATION The Size of Ethanol ProcessingPlautsLong-Run Market Supply CurveAPPLICATION Entry and Exit of SolarPower FirmsAPPLICATION Upward-Sloping Long-RunSupply Curve for CottonAPPLICATION Reformulated GasolineSupply CurvesSolved Problem 8.5Long-Run Competitive EquilibriumCHALLENGE SOLUTION The Risrng Cosfof Keeping On Truckin'Summary 257 Questions 258Chapter 9 Applying the Competitive Model9.19.29.39.49.59.6CHALLENGE Liquor LicensesZero Profit for Competitive Firms inthe Long RunZero Long-Run Profit with Free EntryZero Long-Run Profit When Entry Is LimitedAPPLICATION What's a Name Worth?The Need to Maximize ProfitConsumer WeifareMeasuring Consumer Weifare Using a DemandCurveAPPLICATION Willingness to Pay on eBayEffect of a Price Change on Consumer SurplusAPPLICATION Goods with a Farge ConsumerSurplus Eoss from Price IncreasesSolved Problem 9.1Producer WeifareMeasuring Producer Surplus Using a SupplyCurveUsing Producer SurplusSolved Problem 9.2Competition Maximizes WeifareSolved Problem 9.3APPLICATION Deadweight Loss of ChristmasPresentsPolicies That Shift Supply and Demand CurvesEntry BarrierAPPLICATION Weifare Effects of AllowingFrackingPolicies That Create a Wedge BetweenSupply and DemandWeifare Effects of a Sales TaxAPPLICATION The Deadweight Loss fromGas TaxesSolved Problem 9.4Weifare Effects of a SubsidySolved Problem 9.5Weifare Effects of a Price FloorSolved Problem 9.6APPLICATION How Big Are Farm Subsidiesand Who Gets Them?Weifare Effects of a Price 2832832852852862872882902912929.7ContentsixSolved Problem 9.7APPLICATION The Social Cost of a NaturalGas Price CeilingComparing Both Types of Policies: ImportsFree Trade Versus a Ban on ImportsAPPLICATION Russian Food BanFree Trade Versus a TariffFree Trade Versus a QuotaRent SeekingCHALLENGE SOLUTION Liquor LicensesSummary 302 B Questions 303292Chapter 10 General Equilibrium andEconomic WeifareCHALLENGE Anfi-Price Gougiwg Law#10.1 General EquilibriumFeedback Between Competitive MarketsSolved Problem 10.1Minimum Wages with Incomplete CoverageSolved Problem 10.2APPLICATION Urban Flight10.2 Trading Between Two PeopleEndowmentsMutually Beneficial TradesSolved Problem 10.3Bargaining Ability10.3 Competitive ExchangeCompetitive EquilibriumThe Efficiency of CompetitionObtaining Any Efficient Allocation UsingCompetition10.4 Production and TradingComparative AdvantageSolved Problem 10.4Efficient Product MixCompetition10.5 Efficiency and EquityRole of the GovernmentAPPLICATION The 1% Grow WealthierEfficiencyEquityAPPLICATION How You Vote MattersEfficiency Versus EquityCHALLENGE SOLUTION AMfi-frice GougingLawsSummary 339 Questions 30332332335337338Chapter 11 Monopoly343CHALLENGE Brand-Name und Genend Drugs11.1 Monopoly Profit MaximizationMarginal RevenueSolved Problem 11.1Choosing Price or QuantityGraphical ApproachMathematical ApproachAPPLICATION Apple's iPad343344345347349349351352
x11.211.311.411.511.6ContentsSolved Problem 11.2Effects of a Shift of the Demand CurveMarket PowerMarket Power and the Shape of the DemandCurveAPPLICATION Cable Cars and ProfitMaximizationLerner IndexSolved Problem 11.3Sources of Market PowerMarket Failure Due to Monopoly PricingSolved Problem 11.4Causes of MonopolyCost-Based MonopolySolved Problem 11.5Government Creation of a MonopolyAPPLICATION Botox Patent MonopolyGovernment Actions That ReduceMarket PowerRegulating MonopoliesSolved Problem 11.6APPLICATION Natural Gas RegulationIncreasing CompetitionAPPLICATION Movie Studios Attackedby 3D Printers!Solved Problem 11.7Networks, Dynamics, and BehavioralEconomicsNetwork ExternalitiesNetwork Externalities and BehavioralEconomicsNetwork Externalities as an Explanationfor MonopoliesAPPLICATION eBay's Critical MassA Two-Period Monopoly ModelCHALLENGE:Brand-Name andGeneric DrugsSummary 377 # Qwesrions 64 12.412.5366366369370371 12.637137237337337437437537537612.7APPLICATION Google Uses Bidding forAds to Price DiscriminateTransaction Costs and Perfect PriceDiscriminationGroup Price DiscriminationAPPLICATION Warner Brothers Sets Pricesfor a Harry Potter DVDSolved Problem 12.2Prices and ElasticitiesSolved Problem 12.3Preventing ResaleAPPLICATION Reselling TextbooksSolved Problem 12.4Identifying CroupsAPPLICATION Buying DiscountsWeifare Effects of Group Price DiscriminationNonlinear Price DiscriminationTwo-Part PricingTwo-Part Pricing with Identical CustomersTwo-Part Pricing with NonidenticalConsumersAPPLICATION iTunes for a SongTie-In SalesRequirement Tie-In SaleAPPLICATION Ties That BindBundlingSolved Problem 12.5AdvertisingThe Decision Whether to AdvertiseHow Much to AdvertiseAPPLICATION Super Botvl CommercialsSale PricesSummary 418 ' Questions 419Chapter 13 Oligopoly and MonopolisticCompetitionCHALLENGE Gorernmenf A;rcra/f Swbridies13.1 Market StructuresChapter 12 Pricing and Advertising383 13.2 CartelsWhy Cartels FormCHALLENGE Sabinas383Why Cartels Fail12.1 Conditions for Price Discrimination385Laws Against CartelsWhy Price Discrimination Pays385APPLICATION The Apple-Google-Intel-AdobeAPPLICATION Disneyland Pricing387Intuit-Lucasfilms-Pixar Wage CartelWhich Pinns Can Price Discriminate387Maintaining CartelsPreventing Resale388APPLICATION Cheating on the MapleAPPLICATION Preventing Resale ofSyrup CartelDesigner Bags388MergersNot All Price Differences Are PriceAPPLICATION Mergers to MonopolizeDiscrimination389 13.3 Cournot OligopolyTypes of Price Discrimination389The Duopoly Nash-Cournot Equilibrium12.2 Perfect Price Discrimination390Equilibrium, Elasticity, and the NumberHow a Firm Perfectly Price Discriminates390of FirmsPerfect Price Discrimination Is Efficient but HarmsAPPLICATION Mobile Number PortabilitySome Consumers391Nonidentical FirmsAPPLICATION Botox and Price Discrimination 393Solved Problem 13.1Solved Problem 12.1394Solved Problem 428430430432432433434435435436440442442444445
Contents13.4 Stackelberg OligopolyGraphical ModelSolved Problem 13.3Why Moving Sequentially Is EssentialComparison of Competitive, Stackelberg,Cournot, and Collusive Equilibria13.5 Bertrand OligopolyIdentical ProductsDifferentiated ProductsAPPLICATION Bottled Water13.6 Monopolistic CompetitionAPPLICATION Monopolistically CompetitiveFood Truck MarketEquilibriumSolved Problem 13.4Fixed Costs and the Number of FirmsSolved Problem 13.5APPLICATION Zoning Laws as a Barrierto Entry by Hotel ChainsCHALLENGE SOLUTION Goremmenf Aircra/tSubsidiesSummary 462 Questions 462Chapter 14 GameTheoryCHALLENGE Intel and AMD's AdvertisingStrategies14.1 Static GamesNormal-Form GamesFailure to Maximize Joint ProfitsAPPLICATION Strategie AdvertisingMultiple EquilibriaSolved Problem 14.1Mixed StrategiesAPPLICATION TougbLoveSolved Problem 14.214.2 Repeated Dynamic GamesStrategies and Actions in Dynamic GamesCooperation in a Repeated Prisoners'Dilemma GameSolved Problem 14.314.3 Sequential Dynamic GamesGame TreeSubgame Perfect Nash EquilibriumCredibilityDynamic Entry GameSolved Problem 14.4APPLICATION Keeping Out CasinosSolved Problem 14.514.4 AuctionsElements of AuctionsBidding Strategies in Private-ValueAuctionsWinner's CurseAPPLICATION Bidder's Curse14.5 Behavioral Game TheoryAPPLICATION GM's UltimatumAn 6496ReciprocityCHALLENGE SOLUTION Intel and AMD'sAdvertising StrategiesSummary 498 Questions 499Chapter 15 Factor MarketsCHALLENGE Athfetes' Salaries and TretetPrices15.1 Competitive Factor MarketShort-Run Factor Demand of a FirmSolved Problem 15.1Solved Problem 15.2Long-Run Factor DemandFactor Market DemandCompetitive Factor Market Equilibrium15.2 Effects of Monopolies on Factor MarketsMarket Structure and Factor DemandsA Model of Market Power in Input and OutputMarketsAPPLICATION Unions and ProfitsSolved Problem 15.315.3 MonopsonyMonopsony Profit MaximizationAPPLICATION Monopsony and theGender Wage GapWeifare Effects of MonopsonySolved Problem 15.4CHALLENGE SOLUTION Athletes' Salaries andTicket PricesSummary 526 Questions 527Chapter 16 Interest Rates, Investments,and Capital MarketsCHALLENGE Does Going to College Payf16.1 Comparing Money Today to Moneyin the FutureInterest RatesUsing Interest Rates to Connect the Presentand FutureAPPLICATION Power of CompoundingStream of PaymentsSolved Problem 16.1APPLICATION Saving for RetirementInflation and DiscountingAPPLICATION Winning the Lottery16.2 Choices over TimeInvestingSolved Problem 16.2Solved Problem 16.3Rate of Return on Bonds Behavioral Economics: Time-VaryingDiscountingAPPLICATION Falling Discount Ratesand Self-Control16.3 Exhaustible ResourcesWhen to Seil an Exhaustible 537538540540541542543543544545546546
xiiContents547550550nrDO18.2 The Inefficiency of Competitionwith ExternalitiesAPPLICATION Global WarmingRegulating ExternalitiesEmissions Standard552Emissions Fee553Solved Problem 18.1APPLICATION Why Tax Drivers554Benefits Versus Costs from ControllingPollutionAPPLICATION Protecting Babies561Chapter 17 Uncertainty18.4 Market Structure and ExternalitiesC *BP and Limited Liability561Monopoly and Externalities56317.1 Assessing RiskMonopoly Versus Competitive Weifare563Probabilitywith Externalities564Expected ValueSolved Problem 18.2565Solved Problem 17.1Taxing Externalities in NoncompetitiveVariance and Standard Deviation566Markets567 18.5 Allocating Property Rights to Reduce17.2 Attitudes Toward RiskExpected Utility567Externalities568Risk AversionCoase Theorem570Solved Problem 17.2APPLICATION Buying a Town571APPLICATION Stocks' Risk PremiumMarkets for Pollution571Risk NeutralityAPPLICATION Acid Rain Cap-and-TradeRisk Preference572ProgramAPPLICATION Gambling572Markets for Positive Externalities17.3 Reducing Risk573 18.6 Rivalry and Exclusion574Just Say NoOpen-Access Common PropertyObtain and Use Information574APPLICATION Road CongestionDiversify574Club GoodsAPPLICATION Failure to Diversify576APPLICATION Software PiracyBuy Insurance577Public GoodsSolved Problem 17.3578Solved Problem 18.3APPLICATION Pligbt Insurance579APPLICATION Free Riding on MeaslesAPPLICATION Limited Insurance forVaccinationsNatural Disasters580APPLICATION What's Tbeir Beefi17.4 Investing Under Uncertainty581Trade andRisk-Neutral Investing582PollutionRisk-Averse Investing583Summary 620 VI Questions 621Solved Problem 17.458317.5 Behavioral Economics of Uncertainty584 Chapter 19 Asymmetrie InformationBiased Assessment of Probabilities584APPLICATION Biased EstimatesCIiE Dyingto Work585Violations of Expected Utility Theory585 19.1 Adverse SelectionProspect Theory587Insurance MarketsAPPLICATION Loss Aversion Contracts589Products of Unknown QualityCHAL!TION BP and LimitedSolved Problem 19.1Liability589Solved Problem 19.2Summary 590 Questions 59119.2 Reducing Adverse SelectionEqualizing InformationChapter 18 Externalities, Open-Access,APPLICATION Discounts for DataAPPLICATION Adverse Selection andand Public Goods595Remanufactured GoodsGHALITrade and Pollution595Restricting Opportunistic Behavior18.1 Externalities596 19.3 Price Discrimination Due to False BeliefsAPPLICATION Negative Externalities from Spam 597About QualityPrice of a Scarce Exhaustible ResourceAPPLICATION Redwood TreesWhy Price May Be Constant or Fall16.4 Capital Markets, Interest Rates,and InvestmentsSolved Problem 16.44 Does Going toCHALLEN'College Ray?Swmmary 556 # ßwggAorw 27627628631631632632633635636636
ContentsAPPLICATION Reducing Consumers'Information19.4 Market Power from Price IgnoranceTourist-Trap ModelSolved Problem 19.3Advertising and Prices19.5 Problems Arising from IgnoranceWhcn HiringCheap TalkAPPLICATION Cheap Talk in eBay'sBest Offer MarketEducation as a SignalSolved Problem 19.4Screening in HiringCHALLENGE SOLUTION Dyrng fo WorkSummary 649 Questions 650637637638639640640640642642644646648Chapter 20 Contracts and Moral Hazards653CHALLENGE C&BWM# Back Bomtses20.1 The Principal-Agent ProblemEfficiencySymmetrie InformationAsymmetrie InformationSolved Problem 20.1APPLICATION Honest Cabbie?20.2 Using Contracts to Reduce MoralHazardFixed-Fee ContractsContingent ContractsAPPLICATION Health Insurance andMoral HazardSolved Problem 20.2Solved Problem 20.3APPLICATION Sing for Your SupperSolved Problem 20.4Choosing the Best Contract20.3 Monitoring to Reduce Moral HazardBondingSolved Problem 20.5APPLICATION Capping Oil and GasBankruptciesDeferred PaymentsEfficiency WagesMonitoring Outcomes20.4 Checks on PrincipalsAPPLICATION Layoffs Versus Pay Cuts20.5 Contract ChoiceCHALLENGE SOLUTION CfawmgBackBonusesSummary 678 Questions 7667668669670671672673673674676677Chapter AppendixesAppendix 2A: RegressionsAppendix 3A: Effects of a Specific Taxon EquilibriumAppendix 4A: Utility and Indifference CurvesAppendix 4B: Maximizing UtilityAppendix 5A: The Slutsky EquationAppendix 5B: Labor-Leisure ModelAppendix 6A: Properties of Marginaland Average Product CurvesAppendix 6B: The Slope of an IsoquantAppendix 6C: Cobb-Douglas ProductionFunctionAppendix 7A: Minimum of the AverageCost CurveAppendix 7B: Japanese Beer Manufacturer'sShort-Run Cost CurvesAppendix 7C: Minimizing CostAppendix 8A: The Elasticity of the ResidualDemand CurveAppendix SB: Profit MaximizationAppendix 9A: Demand Elasticities and SurplusAppendix IIA: Relationship Between aLinear Demand Curve and Its MarginalRevenue CurveAppendix IIB: Incidence of a Specific Taxon a MonopolyAppendix 12A: Perfect Price DiscriminationAppendix 12B: Group Price DiscriminationAppendix 12C: Block PricingAppendix 12D: Two-Part PricingAppendix 12E: Profit-MaximizingAdvertising and ProductionAppendix 13A: Nash-Cournot EquilibriumAppendix 13B: Nash-Stackelberg EquilibriumAppendix 13C: Nash-Bertrand EquilibriumAppendix 15A: Factor DemandsAppendix 15B: MonopsonyAppendix 16A: The Present Value ofPayments over TimeAppendix ISA: Weifare Effects of Pollutionin a Competitive MarketAppendix 20A: Nonshirking ConditionAnswers to Selected Questions and ProblemsSources for Challenges and -1A-1A-3A-4A-6A-8A-9A-10A-10A-10A-llA 105
1.1 Microeconomics: The Allocation of Scarce Resources Trade-Offs Who Makes the Decisions Prices Determine Allocations APPLICATION Twinkie Tax 1.2 Models APPLICATION Income Tbresbold Model and China Simplifications by Assumption Testing Theories Maximizing Subject to Constraints Positive Versus Normative 1.3 Uses of Microeconomic Models
