Don't Worry About Micro An Easy Guide to Understanding the Principles of Microeconomics Bearbeitet von Dominik Heckner, Tobias Kretschmer 1. Auflage 2007. Taschenbuch. xxi, 386 S. Paperback ISBN 978 3 540 46470 9 Format (B x L): 15,5 x 23,5 cm Gewicht: 621 g Wirtschaft > Volkswirtschaft > Mikroökonomie, Binnenhandel schnell und portofrei erhältlich bei Die Online-Fachbuchhandlung beck-shop.de ist spezialisiert auf Fachbücher, insbesondere Recht, Steuern und Wirtschaft. Im Sortiment finden Sie alle Medien (Bücher, Zeitschriften, CDs, ebooks, etc.) aller Verlage. Ergänzt wird das Programm durch Services wie Neuerscheinungsdienst oder Zusammenstellungen von Büchern zu Sonderpreisen. Der Shop führt mehr als 8 Millionen Produkte.
Contents Preface I...v Preface II...x Acknowledgments...xiii List of Abbreviations...xxi 1. An Introduction to Economics and this Book...1 1.1 About this Book...1 1.2 A Brief History of Economic Thought...3 1.2.1 Adam Smith, 1723 1790...4 1.2.2 David Ricardo, 1772 1823...6 1.2.3 Karl Marx, 1818 1883...8 1.2.4 John Maynard Keynes, 1883 1946...10 1.2.5 Joseph Schumpeter, 1883 1950...12 1.2.6 Milton Friedman, 1912 2006...13 1.3 The Modern Study of Economics...14 1.3.1 How Economics Differs from Other Social Sciences...14 1.3.2 What Is Economics?...15 1.4 Why Should You Care About Economics?...17 1.5 Positive vs. Normative Questions...18 1.6 Basic Economic Concepts...19 1.6.1 Good, Bad and Intermediate Good...19 1.6.2 Profit and Opportunity Cost...20 1.6.3 Market...21 1.6.4 Utility and Disutility...22 1.6.5 Marginality...22 1.6.6 Ceteris Paribus...23 1.6.7 Reserved Letters and Symbols...24 1.7 Basic Mathematical Concepts...25 1.7.1 Functions...26 1.7.2 Slopes, Rise over Run...27
xvi Contents 1.7.3 Derivatives...29 1.7.4 Asterisk...31 1.8 Chapter Summary...32 Part I Consumer Theory...37 2. Supply and Demand...39 2.1 Demand vs. Want...39 2.2 The Demand Curve...40 2.3 Demand vs. Quantity Demanded...41 2.4 Price Elasticity of Demand...44 2.5 Elastic and Inelastic Goods...52 2.5.1 Substitutability...53 2.5.2 The Influence of Market Definition on Substitutability...57 2.6 Supply...58 2.7 Market Clearing...61 2.8 Price Ceilings and Price Floors...64 2.8.1 Price Ceilings...64 2.8.2 Price Floors...69 2.9 Tax...73 2.10 Chapter Summary...76 3. Rational Consumer Choice...81 3.1 Introducing Rational Choice...81 3.2 Cost Benefit Analysis...83 3.3 Explicit Cost vs. Implicit Cost...84 3.4 Sunk Costs...88 3.5 Understanding Consumption Bundles and Budget Constraints/Lines...89 3.5.1 Consumption Bundles...89 3.5.2 Budget Constraint and Budget Line...90 3.5.3 Change in Price...93 3.5.4 Multiple Goods...94 3.6 The Utility Function...95 3.6.1 Introducing the Utility Function...96 3.6.2 Marginal Utility A Framework for Improving the Utility Function...97 3.6.3 Finalising the Utility Function...99 3.7 Introducing Indifference Curves...104 3.8 The Marginal Rate of Substitution...109 3.9 Finding Optimal Bundles Given Budget Constraints...113 3.10 Two Special Indifference Curves...119
Contents xvii 3.10.1 Perfect Substitutes...119 3.10.2 Perfect Complements...120 3.11 Chapter Summary...121 4. Decomposition of Quantity Demanded...127 4.1 Introducing Normal and Inferior Goods...127 4.2 Shift and Rotation of the Budget Line...131 4.3 Income and Substitution Effects...136 4.4 The Hicks Decomposition...141 4.5 Doing it the Slutsky Way...145 4.6 Deriving the Slutsky Equation...148 4.7 Chapter Summary...153 Part II The Firm and Factor Input Markets...155 5. The Firm and Production...157 5.1 Introducing the Process of Production...157 5.2 Factors of Production...159 5.3 The Production Function...161 5.4 Changing the Quantity of One Input The Short Run...163 5.4.1 The Distinction Between Short and Long Run...163 5.4.2 The Law of Diminishing Returns...165 5.4.3 Marginal Product The Change in Total Product...167 5.4.4 Average Product...170 5.4.5 The Connection Between Marginal and Average Products...172 5.5 Introducing the Long Run...174 5.5.1 Returns to Scale A Change in Both Inputs...175 5.5.2 The Cobb Douglas Production Function...177 5.6 Introducing Isocost Line and Isoquant...180 5.6.1 The Isocost Line...180 5.6.2 The Isoquant...182 5.6.3 The Slope of the Isoquant Marginal Rate of Technical Substitution MRTS...184 5.7 Optimal Input Combinations Cost Minimisation...185 5.8 Perfect Complements and Substitutes...188 5.9 Chapter Summary...189 6. Labour and Capital...195 6.1 Choosing an Optimal Amount of Labour...195 6.1.1 Perfect Competitor s Labour Demand in the Short Run...196 6.1.2 Perfect Competitor s Labour Demand in the Long Run...199 6.1.3 The Imperfect Competitor s Labour Demand...200
xviii Contents 6.2 The Backward Bending Labour Supply Curve...201 6.3 What Is Capital?...204 6.4 Choosing the Optimal Amount of Capital...205 6.5 Capital Growth...206 6.6 Present Value...208 6.7 How Firms Raise Capital A High Level Overview...210 6.8 Weighted Average Cost of Capital...212 6.9 Summary...213 7. Cost Analysis...217 7.1 An Introduction to Cost Analysis...217 7.2 Fixed Cost, Variable Cost, Total Cost...218 7.3 Breakeven Analysis...219 7.4 Introducing Average Cost...223 7.5 Introducing Non-linear Cost...225 7.6 The Cost on the Margin...228 7.7 Long-Run Costs...232 7.8 Seven Plus Three Costs...237 7.9 Chapter Summary...237 Part III Market Structure and Game Theory...241 8. An Introduction to Market Structure...243 8.1 Basic Terms...243 8.1.1 Market...243 8.1.2 Industry...244 8.2 Correctly Defining a Market...245 8.2.1 Important Variables for the Market Definition...245 8.2.2 Defining the Market too Widely...246 8.2.3 Defining a Market too Narrowly...247 8.2.4 Getting it Right...247 8.2.5 Product Differentiation and Marketing...249 8.3 An Overview of Market Structures...250 8.4 Comparing the Market Structures...253 8.5 Measuring Market Power The Lerner Index...254 8.6 Chapter Summary...255 9. Perfect Competition...257 9.1 Assumptions of Perfect Competition...257 9.1.1 Firms Produce Homogenous Goods...258 9.1.2 Firms Are Price Takers as There Are Many Sellers...258 9.1.3 No Barriers to Entry or Exit...259
Contents xix 9.1.4 Perfect Information...260 9.2 Short-Run Profit Maximisation...261 9.3 The Short-Run Shutdown Condition...267 9.4 Perfect Competition in the Long Run...268 9.4.1 Shifting Supply...268 9.4.2 Reality vs. Theory...270 9.5 The Connection Between Marginal and Average Costs...271 9.6 More About the Firm s Supply...274 9.7 Producer and Consumer Surplus...276 9.8 Chapter Summary...280 10. The Monopoly...283 10.1 Making the Connection to Perfect Competition...283 10.2 Good Monopoly, Bad Monopoly?...284 10.2.1 National Rail Transport...285 10.2.2 Luigi s Pizza in Barnville...286 10.2.3 StayAwake...286 10.3 Marginal Revenue Revisited...287 10.4 Profit Maximisation...290 10.5 Shutdown Conditions in Short and Long Run...294 10.6 Elasticity of Demand and Marginal Revenue...295 10.7 Deadweight Loss...298 10.8 The Good Kind Natural Monopoly...301 10.9 Price Discrimination Turning Consumer Surplus into Profit 305 10.9.1 First-Degree Price Discrimination...306 10.9.2 Second-Degree Price Discrimination...307 10.9.3 Third-Degree Price Discrimination...309 10.10 Sustaining a Monopoly...310 10.11 Chapter Summary...312 11. Game Theory...317 11.1 The Basic Tool Kit...317 11.1.1 The Normal Form...318 11.1.2 The Extensive Form...322 11.2 The Prisoner s Dilemma Game...323 11.3 Coordination Games (Battle of the Sexes)...327 11.4 Differentiation Games...329 11.5 A Business Application of an Extensive Form Game...330 11.6 Imperfect Information...332 11.7 Chapter Summary...333
xx Contents 12. Oligopoly Competition...337 12.1 Introducing the Oligopoly...337 12.2 Bertrand Competition...339 12.3 Cournot Competition...342 12.4 Stackelberg Leadership...347 12.5 Collusion...350 12.6 A Summary of Our Findings...353 12.7 Chapter Summary...354 Glossary...359 Index...383