Introduction to Economic Analysis
R. Preston McAfee
Introduction to Economic Analysis
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This book presents standard intermediate microeconomics material and some material that, in the authors' view, ought to be standard but is not. Introductory economics material is integrated. Standard mathematical tools, including calculus, are used throughout. The book easily serves as an intermediate microeconomics text, and can be used for a relatively sophisticated undergraduate who has not taken a basic university course in economics. The focus of this book is on the conceptual tools and not on fluff. As such, it reflects the approach actually adopted by the majority of economists for understanding economic activity. There are lots of models and equations, and no pictures of economists ;-) Economic analysis is used in many situations. When British Petroleum sets the price for Alaskan crude oil, it uses an estimated demand model, both for gasoline consumers and also for the refineries to which BP sells. Economic analysis was used by experts in the antitrust suit brought by the U.S. Department of Justice both to understand Microsoft's incentive to foreclose (eliminate from the market) rival Netscape and consumer behavior in the face of alleged foreclosure. Stock market analysts use economic models to forecast the profits of companies to predict the price of their stocks. When the government forecasts the budget deficit or considers a change in environmental regulations, it uses economic models. This book presents the building blocks of the models in common use by an army of economists thousands of times per day. This book, plus econometrics, provides most of the economic analysis tools to take upper division economics courses of any type.

Language
English
ISBN
Unknown
Brief Contents
Contents
About the Authors
Chapter 1: What Is Economics?
Normative and Positive Theories
Opportunity Cost
Economic Reasoning and Analysis
Chapter 2: Supply and Demand
Demand and Consumer Surplus
Supply and Profit
Market Demand and Supply
Equilibrium
Changes in Demand and Supply
Endnotes
Chapter 3: Quantification
Elasticity
Supply and Demand Changes
Endnotes
Chapter 4: The U.S. Economy
Basic Demographics
Education
Households and Consumption
Production
Government
Trade
Fluctuations
Endnotes
Chapter 5: Government Interventions
Effects of Taxes
Incidence of Taxes
Excess Burden of Taxation
Price Floors and Ceilings
The Politics of Price Controls
Price Supports
Quantity Restrictions and Quotas
Endnotes
Chapter 6: Trade
Production Possibilities Frontier
Comparative and Absolute Advantage
Factors of Production
International Trade
Endnotes
Chapter 7: Externalities
External Effects
Pigouvian Taxes
Quotas
Tradable Permits and Auctions
Coasian Bargaining
Fishing and Extinction
Endnotes
Chapter 8: Public Goods
Free-Riders
Provision with Taxation
Local Public Goods
Endnotes
Chapter 9: Producer Theory: Costs
Types of Firms
Production Functions
Profit Maximization
The Shadow Value
Input Demand
Myriad Costs
Endnotes
Chapter 10: Producer Theory: Dynamics
Reactions of Competitive Firms
Economies of Scale and Scope
Dynamics with Constant Costs
General Long-Run Dynamics
Endnotes
Chapter 11: Investment
Present value
Investment
Investment Under Uncertainty
Resource Extraction
A Time to Harvest
Collectibles
Summer Wheat
Endnotes
Chapter 12: Consumer Theory
Utility Maximization
Budget or Feasible Set
Isoquants
Examples
Substitution Effects
Income Effects
Mathematical Cleanup
Endnotes
Chapter 13: Applied Consumer Theory
Labor Supply
Urban Real Estate Prices
Dynamic Choice
Risk Aversion
Search
Endnotes
Chapter 14: General Equilibrium
Edgeworth Box
Equilibrium With Price System
General Equilibrium
Endnotes
Chapter 15: Monopoly
Sources of Monopoly
Basic Analysis
Effect of Taxes
Price Discrimination
Welfare Effects
Natural Monopoly
Peak-Load Pricing
Endnotes
Chapter 16: Games & Strategic Behavior
Matrix Games
A 3 x 3 game
Nash Equilibrium
Mixed Strategies
Examples
Subgame Perfection
Supergames
Endnotes
Chapter 17: Imperfect Competition
Cournot Oligopoly
Cournot Industry Performance
Hotelling Differentiation
The Circle Model
Endnotes
Chapter 18: Information
Market for Lemons
Myerson-Satterthwaite Theorem
Signaling
Search and Price Dispersion
Endnotes
Chapter 19: Agency Theory
Principals and Agents
Cost of Providing Incentives
Multi-tasking
Multi-tasking without Homogeneity
Endnotes
Chapter 20: Auctions
English Auction
Sealed-bid Auction
Dutch Auction
Vickrey Auction
The Winner’s Curse and Linkage
Auction Design
Endnotes
Chapter 21: Antitrust
Sherman Act
Trusts, etc., in restraint of trade illegal; penalty
Monopolizing trade a felony; penalty
Clayton Act
Price-Fixing
Mergers
Endnotes
Index
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