CONTENTS
1 INTRODUCTION = 1
1.1 Microeconomics : Its Scope and Relevance = 3
1.2 Economic Models and Scientific Discovery = 6
1.3 Outline of the Book = 11
PART Ⅰ DEMAND = 13
2 CONSUMER BEHAVIOR : PREFERENCES, BUDGETS, AND UTILITY MAXIMIZATION = 15
2.1 Consumer Preferences = 15
2.2 Consumer's Budget Constraint = 23
2.3 Utility Maximization = 27
2.4 Cash versus In-Kind Gifts : The Case of Food Stamps = 31
2.5 Income-Leisure Choices = 34
2.6 Saving and Consumption = 35
2.7 Summary = 38
3 INDIVIDUAL AND MARKET DEMAND = 41
3.1 The Consumer's Response to Income Changes = 41
3.2 The Consumer's Response to Price Changes = 46
3.3 Market Demand = 51
3.4 Price Indices and Real Income = 53
3.5 Price Elasticities = 60
3.6 Changes in Information = 66
3.7 Extensions : Household Production = 67
3.8 Summary = 68
4 ESTIMATION OF MARKET DEMAND = 73
4.1 The Statistical Nature of Empirical Demand Functions = 73
4.2 Model Selection and the Gathering of Data = 74
4.3 Bivariate Regressions : Their Meaning and Interpretation = 81
4.4 Multivariate Regressions = 90
4.5 The Identification Problem = 93
4.6 Summary = 94
PART Ⅱ PRODUCTION AND COST = 99
5 THEORY OF PRODUCTION = 101
5.1 The Production Function = 101
5.2 Short-Run Production = 103
5.3 Long-Run Production = 109
5.4 Input Substitution = 112
5.5 Least Cost Combination of Inputs = 113
5.6 Expansion Path of Firm = 118
5.7 Returns to Scale = 119
5.8 Changes in Input Prices = 124
5.9 Hiring and Overtime Decisions = 126
5.10 Summary = 130
6 THEORY OF COST = 135
6.1 The Nature of Cost = 135
6.2 Short-Run Cost Curves = 141
6.3 Long-Run Cost Curves = 148
6.4 Relationship between Long-Run and Short-Run Cost Curves = 154
6.5 Summary = 156
7 PRODUCTION AND COST : EXTENSIONS AND APPLICATIONS = 161
7.1 Make-or-Buy Decisions = 161
7.2 Technological Change and Learning by Doing = 163
7.3 Optimal Inventories = 166
7.4 Location Decisions = 171
7.5 Summary = 176
PART Ⅲ THEORY OF FIRM AND MARKET STRUCTURE = 181
8 THEORY OF THE FIRM = 183
8.1 Definition of a Firm = 183
8.2 Why Firms Exist = 184
8.3 Profit = 186
8.4 Goals of the Firm = 187
8.5 Coping with Shirking and Malfeasance = 190
8.6 Capital Budgeting = 195
8.7 Summary = 198
9 THE COMPETITIVE FIRM AND INDUSTRY = 201
9.1 The Meaning of Competition = 201
9.2 Short-Run Profit Maximization by the Firm = 203
9.3 Short-Run Firm Supply Curve = 207
9.4 Shut-Down Decisions = 209
9.5 Short-Run Industry Supply = 210
9.6 Long-Run Profit Maximization by the Firm = 215
9.7 Competitive Industry Equilibrium = 217
9.8 Summary = 224
10 COMPETITION : EXTENSIONS AND APPLICATIONS = 227
10.1 Entry and Exit Decisions = 227
10.2 Survival of Firms = 231
10.3 The Survival of Products = 234
10.4 Governmental Actions = 240
10.5 Joint Production = 247
10.6 Summary = 249
11 MONOPOLY : FIRM AND INDUSTRY = 253
11.1 Concept of Monopoly = 253
11.2 Sources of Monopoly = 254
11.3 Demand and Marginal Revenue = 257
11.4 Profit Maximization : Short Run = 260
11.5 Profit Maximization : Long Run = 265
11.6 Monopoly Supply = 266
11.7 Price Discrimination = 268
11.8 The Multiplant Monopolist = 273
11.9 Summary = 276
12 MONOPOLY : EXTENSIONS AND APPLICATIONS = 279
12.1 Peak Load Pricing = 279
12.2 Transfer Pricing = 283
12.3 Influence of Taxation = 293
12.4 Output Decisions under Learning by Doing = 295
12.5 Patents, Copyrights, and Trademarks = 299
12.6 Summary = 302
13 IMPERFECT COMPETITION = 307
A. OLIGOPOLY = 307
13.1 Noncollusive Models of Oligopoly = 308
13.2 Oligopoly and Game Theory = 313
13.3 Cartels = 316
13.4 A Positive Theory of Collusion = 319
13.5 Dominant Firm Model = 322
B. MONOPOLISTIC COMPETITION = 324
13.6 Nature of Monopolistic Competition = 324
13.7 Short-Run Equilibrium = 325
13.8 Long-Run Equilibrium = 328
13.9 Summary = 330
PART Ⅳ INPUT MARKETS = 335
14 COMPETITIVE INPUT MARKETS = 337
14.1 Demand for Inputs = 337
14.2 Input Market Equilibrium = 343
14.3 Discrimination = 346
14.4 Compensating Wage Differentials = 347
14.5 Investment in Skills = 355
14.6 Summary = 357
15 IMPERFECT INPUT MARKETS = 361
15.1 Effects of a Minimum Wage = 361
15.2 Occupational Licensure = 366
15.3 Labor Unions = 368
15.4 Monopsony = 375
15.5 Summary = 380
PART Ⅴ UNCERTAINTY AND INFORMATION = 383
16 UNCERTAINTY AND RISK PREFERENCES = 385
16.1 Some Elements of Probability = 385
16.2 Profit Maximization and Uncertainty = 389
16.3 Expected Utility Theory = 390
16.4 Attitudes Toward Risk = 393
16.5 Comparison of Investment Options = 398
16.6 Portfolio Theory = 400
16.7 Summary = 403
Appendix／Graphical Measurement of Expected Utility = 406
17 BUSINESS DECISIONS UNDER UNCERTAINTY = 409
17.1 Optimal Customer Queuing = 409
17.2 Optimal Bidding Behavior = 413
17.3 Random Demand and Optimal Output = 419
17.4 Spot Markets and Long-Term Contracts = 424
17.5 Summary = 427
18 THE ECONOMICS OF INFORMATION = 431
18.1 Value of Perfect Information = 431
18.2 The Value of Forecasting = 435
18.3 Asymmetric Information in Contract Law = 438
18.4 The Market for Lemons = 439
18.5 Job Search = 440
18.6 Advertising and Price Dispersion = 444
18.7 Advertising as Information = 448
18.8 Summary = 450
PART Ⅵ GENERAL EQUILIBRIUM AND SOCIAL WELFARE = 453
19 GENERAL EQUILIBRIUM AND ECONOMIC WELFARE = 455
19.1 Partial versus General Equilibrium = 455
19.2 Efficiency Conditions = 456
19.3 Pareto Optimality and Perfect Competition = 467
19.4 Social Welfare Function = 468
19.5 Monopoly and Social Welfare = 471
19.6 Summary = 474
20 MARKET FAILURE = 477
20.1 Decreasing Costs = 477
20.2 Externalities = 481
20.3 Achieving Pareto Efficiency = 485
20.4 The Coase Theorem = 489
20.5 Standards versus Taxes = 492
20.6 Public Goods = 495
20.7 Public Goods and Efficiency = 495
20.8 Free Riders and Market Failure = 497
20.9 Summary = 499
APPENDIX = 503
INDEX = 507
