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1.1 Macro and Microeconomics 2

1 Introduction to Economics 2

1.2 Scarcity 4

1.3 Society's Technological Possibilities 5

1.4 Money and Capital 12

1.5 Important Concepts and Definitions 14

Part Ⅰ Microeconomics 20

2 Demand and Supply 20

2.1 Demand 20

2.2 Supply 24

2.3 Equilibrium and Disequilibrium 27

2.4 Shifts in Supply and Demand 34

2.5 Shifts in Equilibrium 40

3.1 Price Elasticity of Demand 44

3 Elasticity of Supply and Demand 44

3.2 Price Elasticity of Supply 54

4 Consumer Behavior 58

4.1 Consumer Decision Making 58

4.2 Utility Analysis 59

4.3 Evaluating the Benefits of Consumption 66

5 Production and Costs 73

5.1 Business Organization 73

5.2 Theory of Production 77

5.3 Production in the Short-run 83

5.4 Cost 90

5.5 Costs in the Short-run 91

5.6 Production and Cost in the Long-run 93

5.7 Economic vs.Accounting Costs 97

6.1 Conditions for a Perfectly Competitive Environment 100

6 Perfect Competition 100

6.2 Profit Maximization and Equilibrium of a Competitive Firm 102

6.3 Short-run Price and Output Under Perfect Competition 105

6.4 Long-run Price and Output Under Perfect Competition 107

6.5 The Efficiency of Competition 108

7 Imperfect Competition 112

7.1 Monopoly 112

7.2 Oligopoly and Duopoly 116

7.3 Price Discrimination 119

7.4 Restrictions in the Labor Market 121

7.5 Antitrust Policy 122

8 Game Theory 126

8.1 Some Basics 126

8.2 Zero-sum Games and Mixed Strategy 131

8.3 Nash Equilibrium 138

9 Income Distribution and Market Failure 146

9.1 Marginal Productivity 146

9.2 The Demand for Inputs 149

9.3 Market Failure and Government Intervention 155

9.4 Regulation 158

Part Ⅱ Macroeconomics 166

10 Measuring Output of the Macroeconomy 166

10.1 Measuring Total Output—Gross Domestic Product(GDP) 166

10.2 GDP Accounting Complications 171

10.3 How to Measure GDP—Circular Flow of Income and Expenditures 175

10.4 Real GDP 181

10.5 Empirical Applications 183

11 Equilibrium in Product Market and Money Market 186

11.1 The IS-LM Interactive Graphical Model 186

11.2 Equilibrium 192

12.1 Fiscal Policy 194

12 Fiscal Policy 194

12.2 Discretionary Fiscal Expenditures vs.Automatic Stabilizers 195

12.3 Federal Government Expenditures 196

12.4 Federal Government Revenues 197

12.5 State and Local Government Spending 199

12.6 State and Local Government Revenues 199

12.7 The Multiplier Model 200

13 Functions of Money 204

13.1 Functions of Money 204

13.2 Money Supply Measures 205

13.3 The Federal Reserve System 205

13.4 Federal Reserve System Organization 206

13.5 Federal Reserve Tools to Change the Money Supply 206

13.6 Balance Sheets 207

13.8 Required and Excess Reserves 208

13.7 Fractional Reserve Banking 208

13.9 Describe the significance of the Federal Deposit Insurance Corporation(F.D.I.C.) 209

13.10 Money Creation 209

13.11 The Velocity of Circulation of Money 212

13.12 The Quantity Theory of Money 213

14 The Keynesian Model 214

14.1 Simple Keynesian Model 214

14.2 Aggregate Expenditures 217

14.3 Equilibrium 217

14.4 Consumption Function 218

Part Ⅲ Dynamic Economics 221

15 Unemployment and Labor Markets 221

15.1 Specialization 221

15.2 Production Possibilities Curve 227

15.3 Applications of the Production Possibilities Curve 235

16.1 Employment and Unemployment 241

16 Unemployment and the Labor Market 241

16.2 Labor Market Model 251

17 Measuring Changes in Prices 261

17.1 Inflation and Deflation 261

17.2 Costs of Inflation 262

17.3 Measuring Inflation with Price Indexes 265

17.4 Causes of Inflation 271

18 Business Cycles 275

18.1 Characteristics of Business Cycles 275

18.2 Business Cycle Relationships 281

18.3 Forecasting Business Cycles 286

19 Economic Growth 290

19.1 Compound Rates of Growth 290

19.2 Growth in Income Per Capita 291

19.3 Growth and Recipes 292

19.4 Objects and Ideas 294

19.5 Meta-ideas 297

Part Ⅳ Reading Materials 300

1．Adam Smith-Capitalism's Prophet 300

2．Making Visible the Miracle of the Invisible Hand 304

3．David Hume-Foundations of the Classical School of Economics 306

4．Paper Money and Sound Banking 309

5．Do Low Interest Rates Stimulate Economic Activity? 310

6．The Growth of Growth Theory 312

7．Baby Boom and Bust 315

8．Microeconomics 318

9．Benefit-Cost Analysis 325

10．Gender Gap 330

11．Minimum Wages 335

12．Industrial Concentration 342

Glossary 347