Page 19 - Microeconomics, Fourth Edition

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CONTENTS

PART 1 INTRODUCTION TO MICROECONOMICS

CHAPTER 1 Analyzing Economic Problems 1
Market-Level versus Brand-Level Price Elasticities
Microeconomics and Climate Change of Demand 49
1.1 Why Study Microeconomics? 4 2.3 Other Elasticities 51
1.2 Three Key Analytical Tools 5 Income Elasticity of Demand 51
Constrained Optimization 6 Cross-Price Elasticity of Demand 52
Equilibrium Analysis 12 Price Elasticity of Supply 54
Comparative Statics 13 2.4 Elasticity in the Long Run versus
1.3 Positive and Normative Analysis 18 the Short Run 54
Greater Elasticity in the Long Run Than in
LEARNING-BY-DOING EXERCISES the Short Run 54
1.1 Constrained Optimization: The Farmer’s Fence 7 Greater Elasticity in the Short Run Than in the
1.2 Constrained Optimization: Consumer Choice 8 Long Run 56
1.3 Comparative Statics with Market Equilibrium in the
2.5 Back-of-the-Envelope Calculations 57
U.S. Market for Corn 16
Fitting Linear Demand Curves Using Quantity, Price,
1.4 Comparative Statics with Constrained
and Elasticity Information 58
Optimization 18
Identifying Supply and Demand Curves on the Back of an
Envelope 59
Identifying the Price Elasticity of Demand from
CHAPTER 2 Demand and Supply Analysis 26 Shifts in Supply 61
What Gives with the Price of Corn? APPENDIX Price Elasticity of Demand along a
2.1 Demand, Supply, and Market Equilibrium 29 Constant Elasticity Demand Curve 72
Demand Curves 30 LEARNING-BY-DOING EXERCISES
Supply Curves 32 2.1 Sketching a Demand Curve 31
Market Equilibrium 33 2.2 Sketching a Supply Curve 33
Shifts in Supply and Demand 35 2.3 Calculating Equilibrium Price and Quantity 34
2.2 Price Elasticity of Demand 43 2.4 Comparative Statics on the Market
Elasticities along Specific Demand Curves 45 Equilibrium 37
Price Elasticity of Demand and Total Revenue 47 2.5 Price Elasticity of Demand 45
Determinants of the Price Elasticity of Demand 48 2.6 Elasticities along Special Demand Curves 47

PART 2 CONSUMER THEORY

CHAPTER 3 Consumer Preferences and 3.3 Special Preferences 92
the Concept of Utility 73 Perfect Substitutes 92
Perfect Complements 93
Why Do You Like What You Like?
The Cobb–Douglas Utility Function 94
3.1 Representations of Preferences 75 Quasilinear Utility Functions 95
Assumptions about Consumer Preferences 75
Ordinal and Cardinal Ranking 76 LEARNING-BY-DOING EXERCISES
3.2 Utility Functions 77 3.1 Marginal Utility 82
Preferences with a Single Good: The Concept of 3.2 Marginal Utility That Is Not Diminishing 83
Marginal Utility 77 3.3 Indifference Curves with Diminishing
Preferences with Multiple Goods: Marginal Utility, Indifference MRS x,y 90
Curves, and the Marginal Rate of Substitution 81 3.4 Indifference Curves with Increasing MRS x,y 91

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