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Book Details

  • Paperback
  • Bookstore's Wholesale Price: $135.00
  • July 2014
  • ISBN: 978-0-393-91969-1
  • 752 pages
  • Territory Rights: Worldwide


Economics USA

Eighth Edition

Paperback

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$70.00

Nariman Behravesh (Author, IHS, Inc.)

 

Help your students appreciate how economic thinking and policy apply in the real world.

This qualitative and applied introductory text has been revised and reorganized for a contemporary approach. Eighty-four case studies—three per chapter—and eighty-four videos produced by the Annenberg Foundation—one for each case study—complement the text and reflect the most current research and debates in economics.

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Case studies show how economic thinking and policy apply in the real world

Economics USA is rich with current and historical examples that give context to economic data, performance, and debate. Three case studies in every chapter, many of them new to this edition, offer students a lens through which to see economic principles—and outcomes—at work. Cross-Chapter Cases, such as “What Should Be Done about Global Warming” after Part II or “The Debate over Post-Crisis Fiscal Austerity” after Part IV, tie the concepts of their sections together so students can see the application of wider economic principles in the real world.

At the end of each chapter, “Problems and Questions” give students the opportunity to apply what they have learned and “Viewpoint for Analysis” challenges them to think more deeply about the outcomes of economic performance and policies.

New videos with a real-world emphasis

Three videos—one-third of which are new to this edition and each directly corresponding to an in-text case study—are available to complement each of the text’s twenty-eight chapters. New topics include Designer Jeans (Chapter 3), Big Pharmaceuticals (Chapter 10), Internet and Economic Growth (Chapter 12), Obama and Fiscal Policy (Chapter 18), and the Economic Crisis (videos in Chapters 16, 20, 21, and 25).  

Streamlined, qualitative, and accessible

Short chapters—most are approximately twenty pages—address all the major economics topics, making Economics USA an ideal and accessible overview. Concepts are covered in concise sections with learning objectives, bolded key terms, and an end-of-chapter review, so students get everything they need and nothing they don’t. 

Contemporary coverage and organization

The Eighth Edition has been thoroughly revised and reorganized. Microeconomics chapters now appear before those on Macroeconomics, and the text now includes extensive coverage of the Economic Crisis. 

    ** new to this edition

    Preface
    Part One: Introduction to Economics

    Prologue: Economic Problems: A Sampler
    **Financial Crises
    Unemployment and Inflation
    Labor Productivity and Rising Standard of Living
    Challenges Facing Emerging Market Economies
    Eliminating Poverty
    Looking Ahead

    Chapter 1: What Is Economics?
    What Is Economics?
    Opportunity Cost: A Fundamental Concept
    Case Study 1.1: Land Use in Alaska
    The Impact of Economics on Society
    Case Study 1.2: Eliminating Brown Lung Disease
    The Methodology of Economics
    The Tasks of an Economic System
    Case Study 1.3: Adam Smith, Father of Modern Economics
    Exploring Further: A Simple Introductory Model of the Economic System
    Case Study 1.4: Producing Both Guns and Butter, 1939 to 1941
    Review and Practice

    Chapter 2: Markets and Prices
    Consumers and Firms
    Markets
    The Demand Side of a Market
    The Supply Side of a Market
    Equilibrium Price
    Actual Price
    How the Price System Determines What Is Produced
    Case Study 2.1: Low-Cost Homes after World War II
    How the Price System Determines How Goods Are Produced
    How the Price System Determines Who Gets What
    Case Study 2.2: Why Do Some Sports Stars Earn More Than the President of the United States?
    The Price System and Economic Growth
    The Circular Flow of Money and Products
    Limitations of the Price System
    Case Study 2.3: The Food Stamp Program and the Allocation of Resources
    Exploring Further: Shifts in the Demand and Supply Curves
    Review and Practice

    Cross Chapter Case—Part 1: The Key Role of Saving and Investment in Raising Per Capita Income

    Part Two: Economic Decision Making: The Firm, the Consumer, and Society

    Chapter 3: The Business Firm: Organization, Motivation, and Optimal Input Decision
    General Motors: A Study
    Case Study 3.1: Studebaker and the Low-Volume Trap
    U.S. Firms, Large and Small
    Case Study 3.2: The Collapse of Enron and the Importance of Corporate Governance
    Motivation of the Firm
    Technology, Inputs, and the Production Function
    Types of Inputs
    The Short Run and the Long Run
    Average Product and Marginal Product of an Input
    The Law of Diminishing Marginal Returns
    **Case Study 3.3: To Offshore or Not? That Is the Question
    The Optimal Input Decision
    Exploring Further: How to Produce Kansas Corn
    Review and Practice

    Chapter 4: Getting behind the Demand and Supply Curves
    The Demand Curve
    Consumer Expenditures
    A Model of Consumer Behavior
    The Equilibrium Market Basket
    The Consumer’s Demand Curve
    Deriving the Market Demand Curve
    The Supply Curve
    What Are Costs?
    Case Study 4.1: Conserving Water in a California Drought
    Short-Run Cost Functions
    Average Costs in the Short Run
    Case Study 4.2: Oil Price Swings and Drilling Activity
    Marginal Cost in the Short Run
    Long-Run Average Cost Function
    Returns to Scale
    Review and Practice

    Chapter 5: Market Demand and Price Elasticity

    Market Demand Curves
    Price Elasticity of Demand
    Determinants of the Price Elasticity of Demand
    Price Elasticity and Total Money Expenditure
    Case Study 5.1: Instability of Farm Prices and the Price Elasticity of Demand
    Industry and Firm Demand Curves
    Income Elasticity of Demand
    Cross Elasticity of Demand
    Exploring Further: The Farm Problem
    Review and Practice

    Chapter 6: Economic Efficiency, Market Supply, and Perfect Competition

    Market Structure and Economic Performance
    Perfect Competition
    The Output of the Firm
    The Market Supply Curve
    Price and Output: The Short Run
    Price and Output: The Long Run
    The Allocation of Resources under Perfect Competition: A More Detailed View
    Case Study 6.1: Price Ceilings and Price Supports
    Case Study 6.2: Starting from Scratch: The Transition from Communism to Capitalism
    Review and Practice

    Chapter 7: Monopoly and Its Regulation
    Causes of Monopoly
    Demand Curve and Marginal Revenue under Monopoly
    Price and Output: The Short Run
    Price and Output: The Long Run
    Perfect Competition and Monopoly: A Comparison
    The Case against Monopoly
    Case Study 7.1: John D. Rockefeller and Standard Oil of Ohio
    Public Regulation of Monopoly
    Case Study 7.2: Network Effects and the Case against Microsoft
    The Deregulation Movement
    Exploring Further: The Defense of Monopoly Power
    Case Study 7.3: The Saga of AT&T
    Review and Practice

    Chapter 8: Monopolistic Competition, Oligopoly, and Antitrust Policy
    Monopolistic Competition and Oligopoly: Their Major Characteristics
    Monopolistic Competition
    Price and Output under Monopolistic Competition
    Oligopoly
    The Theory of Games
    Collusion and Cartels
    Barriers to Collusion
    Case Study 8.1: The Electrical Conspiracy
    Price Leadership
    Nonprice Competition
    Case Study 8.2: How Ford Became Number Two and General Motors Became Number One
    Comparing Oligopoly with Perfect Competition
    The Antitrust Laws
    Case Study 8.3: Airline Deregulation: Success or Failure?
    The Role of the Courts
    The Role of the Justice Department
    The Effectiveness of Antitrust Policy
    Review and Practice

    Chapter 9: Pollution and the Environment
    Our Environmental Problems
    The Important Role of External Diseconomies
    Case Study 9.1: Reserve Mining: The Price of Cleaner Water
    Economic Growth and Environmental Pollution
    Public Policy toward Pollution
    Case Study 9.2: The Uphill Battle to Ratify the Kyoto Climate Treaty and Cap-and-Trade Legislation in the United States
    Pollution Control Programs in the United States
    How Clean Should the Environment Be?
    Case Study 9.3: Dolphin-Safe Tuna
    Review and Practice

    **Cross Chapter Case—Part 2: What Should Be Done about Global Warming?

    Part Three: The Distribution of Income and the Role of Government in Markets

    Chapter 10: The Supply and Demand for Labor
    The Labor Force and the Price of Labor
    Wage and Employment Determination under Perfect Competition
    The Market Demand Curve for Labor
    The Market Supply Curve for Labor
    Equilibrium Price and Quantity of Labor
    Labor Unions
    The U.S. Labor Movement
    **Case Study 10.1: The Battle between Walmart and Labor Unions
    How Unions Increase Wages
    Collective Bargaining
    Case Study 10.2: The Closing of the Herald Tribune
    Recent Trends
    Case Study 10.3: Why Was Europe's Unemployment Rate Higher than America’s in the 1990s?
    Review and Practice

    Chapter 11: Interest, Rent, and Profit
    The Nature of Interest
    Determining the Interest Rate
    Case Study 11.1: Anti-Usury Laws and Mortgage Activity
    Functions of the Interest Rate
    Capitalization of Assets
    The Present Value of Future Income
    Rent: Nature and Significance
    Profit
    **Case Study 11.2: Are Drug Company Profits Too High?
    The Functions of Profits
    Case Study 11.3: eBay: The Story of a Successful Internet Company
    Review and Practice

    Chapter 12: Poverty, Income Inequality, and Discrimination
    How Much Inequality of Income?
    Some Causes of Inequality
    How the Tax Structure Affects Income Inequality
    Factors behind the Recent Rise in Inequality
    Income Inequality: The Pros and Cons
    The Trade-off between Equality and Efficiency
    What Is Poverty?
    Social Insurance
    Case Study 12.1: Job Training Programs and the War on Poverty
    Antipoverty Programs
    Case Study 12.2: Is Welfare Reform Working?
    The Problem of Discrimination
    **Case Study 12.3: Inequality of Outcomes versus Inequality of Opportunities
    Case Study 12.4: Equal Pay for Work of “Comparable Worth”
    Review and Practice

    Chapter 13: Economic Growth
    What Is Economic Growth?
    Economic Growth as a Policy Objective
    Thomas Malthus and Population Growth
    David Ricardo and Capital Formation
    Case Study 13.1: The Club of Rome’s “Limits to Growth” Report
    Capital Formation and Economic Growth
    The Role of Human Capital
    The Role of Technological Change
    Case Study 13.2: Computer-Assisted Design and Manufacture at Boeing Aircraft
    Endogenous Technological Change
    Entrepreneurship and the Social Environment
    The Gap between Actual and Potential Output
    Case Study 13.3: The Ford Assembly Line
    Case Study 13.4: Technology and the Rapid Rise in Living Standards
    Review and Practice

    Chapter 14: Public Goods and the Role of the Government
    What Functions Should the Government Perform?
    Establishing “Rules of the Game”
    Redistribution of Income
    Providing Public Goods
    **Case Study 14.1: The Case of 9/11—Why Airports Can Be Privatized, But Airport Security Cannot
    Externalities
    The Theory of Public Choice
    Case Study 14.2: The Tennessee Valley Authority
    Principles of Taxation
    The Personal Income Tax
    The Property Tax and the Sales Tax
    Case Study 14.3: Proposition 13 000
    Tax Incidence
    Review and Practice

    **Cross Chapter Case Study—Part 3: U.S. Health Care Reform: The Twin Challenges of Universal Coverage and Cost Control

    Part Four: National Income and Output

    Chapter 15: National Income and Product
    Case Study 15.1: GDP, GNP, and Other Measures of Economic Activity
    Measuring Gross Domestic Product
    Adjusting GDP for Price Changes
    Case Study 15.2: Understanding the New Estimates of GDP
    Using Value-Added to Calculate GDP
    The Limitations of GDP
    Two Approaches to GDP
    Case Study 15.3: Using GDP Estimates in World War II
    The Expenditures Approach to GDP
    The Income Approach to GDP
    Review and Practice

    Chapter 16: Business Fluctuations and Unemployment

    Business Fluctuations
    Aggregate Supply and Demand
    National Output and the Price Level
    Unemployment
    Case Study 16.1: Unemployment: The Classical View
    Case Study 16.2: Karl Marx on Unemployment
    The Costs of Unemployment
    Case Study 16.3: John Maynard Keynes and the Great Depression
    **Case Study 16.4: A New (and Old) Way of Looking at Booms and Busts
    Exploring Further: Effects of Shifts in the Aggregate Demand and Short-Run Aggregate Supply Curves
    Exploring Further: The Long-Run Aggregate Supply Curve
    Review and Practice

    Chapter 17: The Determination of National Output and the Keynesian Multiplier
    The Consumption Function
    The Saving Function
    Determinants of Investment
    The Investment Decision
    The Equilibrium Level of Gross Domestic Product
    Aggregate Flows of Income and Expenditure
    Reconciling Aggregate Demand and Supply Curves with Income-Expenditure Analysis
    Changes in Equilibrium Output
    The Volatility of Investment
    Effects of Changes in Intended Investment
    Case Study 17.1: Keynes's Criticisms of the Classical View
    The Multiplier
    Case Study 17.2: Investment and a Great Crash
    Exploring Further: Nonincome Determinants of Consumption
    Review and Practice

    Chapter 18: Fiscal Policy and National Output

    Government Expenditure and Gross Domestic Product
    Taxation and Gross Domestic Product
    Fiscal Policy: Aggregate Demand and Supply Curves
    Makers of Fiscal Policy
    Case Study 18.1: The Employment Act of 1946
    Automatic Stabilizers
    Case Study 18.2: President Eisenhower and Automatic Stabilizers
    Discretionary Fiscal Policy
    Size and Nature of Government Activities
    Case Study 18.3: President Kennedy and the Tax Cut of 1964
    **Case Study 18.4: The Obama Fiscal Stimulus of 2009
    Exploring Further: Including Net Exports in the Simple Keynesian Model
    Review and Practice

    Chapter 19: Inflation
    What Is Inflation?
    Measuring Inflation
    The Impact of Inflation
    Demand-Side and Supply-Side Inflation
    Case Study 19.1: Demand-Side Inflation and the Tax Surcharge of 1968
    The Phillips Curve
    Case Study 19.2: What Is the NAIRU?
    Review and Practice

    Cross Chapter Case—Part 4: The Treasury Launches a New Type of Security

    Part Five: Money, Banking, and Stabilization Policy

    Chapter 20: Money and the Banking System
    What Is Money?
    The Money Supply, Narrowly Defined
    The Money Supply, Broadly Defined
    Commercial Banks in the United States
    How Banks Operate
    Case Study 20.1: The Failure of the Knickerbocker Trust in 1907
    The Balance Sheet of an Individual Bank
    Fractional Reserve Banking
    The Safety of the Banks
    Case Study 20.2: Comparing the U.S. Savings and Loan Crisis and the Japanese Banking Crisis
    **Case Study 20.3: Financial Re-Regulation after the Financial Crisis of 2008–09
    How Banks Can Create Money
    Exploring Further: A General Proposition Concerning the Effect of Excess Reserves
    Review and Practice

    Chapter 21: The Federal Reserve and Monetary Policy
    The Aims of Monetary Policy
    Makers of Monetary Policy
    The Federal Reserve System
    Functions of the Federal Reserve
    The Federal Reserve Banks: Their Consolidated Balance Sheet
    Open Market Operations
    Changes in the Legal Reserve Requirements
    Case Study 21.1: The Independence of the Federal Reserve
    Changes in the Discount Rate
    Exploring Further: More on the Effects of Monetary Policy
    Case Study 21.2: Crisis Management by the Fed
    Review and Practice

    Chapter 22: Supply Shocks and Inflation
    Supply-Side Inflation
    Difficulties in Distinguishing Supply-Side from Demand-Side Inflation
    The Instability of the Phillips Curve
    Case Study 22.1: Stagflation
    The Transitory Nature of the Trade-off between Inflation and Unemployment
    Case Study 22.2: How Serious of a Threat Is Deflation?
    The Importance of Expectations
    How the Phillips Curve Self-Destructs: An Example
    Wage and Price Controls
    Incomes Policies
    Case Study 22.3: The Steel Price Increase: Incomes Policy in Action
    Exploring Further: The Fed and Supply-Side Inflation
    Review and Practice

    Chapter 23: Productivity, Growth, and Technology Policy
    Growth of Per Capita Output in the United States
    The Productivity Slowdown and Its Consequences
    Causes of Productivity Swings
    Has There Been a Decline in the U.S. Innovation Rate?
    Mechanisms for Federal Support of Civilian Technology
    **Case Study 23.1: Positive Externalities and the Role of the Government in Encouraging Innovation
    Importance of Investment in Plant and Equipment
    Case Study 23.2: Asian Growth: Miraculous or Not?
    Case Study 23.3: How Widespread Was the Productivity Boom of the Late 1990s?
    Importance of the General Economic Climate
    Exploring Further: Supply-Side Government Policies and the Aggregate Supply Curve
    Case Study 23.4: Supply-Side Economics and Tax Cuts
    Review and Practice

    Chapter 24: Surpluses, Deficits, Public Debt, and the Federal Budget
    How Big Are U.S. Budget Surpluses or Deficits?
    Controversies over Deficits
    The Structural Deficit
    The National Debt: Size and Growth
    The Political Economy of Budget Deficits
    Alternative Philosophies Regarding the Federal Budget
    Case Study 24.1: Can We Afford Social Security and Medicare?
    Case Study 24.2: What Happened to the Federal Budget Surplus?
    The Federal Budgetary Process
    The Federal Tax Legislative Process
    Recent U.S. Experience with Fiscal Policy and Deficits
    **Case Study 24.3: Rising National Debt Levels Are Unsustainable
    Review and Practice

    Chapter 25: Monetary Policy, Interest Rates, and Economic Activity

    The Value of Money
    Inflation and the Quantity of Money
    Unemployment and the Quantity of Money
    Determinants of the Quantity of Money
    The Demand for Money
    How Changes in the Money Supply Affect the National Output
    The Monetarists
    The Velocity of Circulation of Money
    The Equation of Exchange
    The Crude Quantity Theory of Money and Prices
    Case Study 25.1: The Velocity of Circulation of Money and the Fed’s 1975 Decision
    When Is Monetary Policy Tight or Easy?
    Should the Fed Pay More Attention to Interest Rates or the Money Supply?
    Problems in Formulating Monetary Policy
    Case Study 25.2: How Much Attention Should the Fed Pay to the Stock Market (and House Prices)?
    Should the Fed Be Governed by a Rule?
    **Case Study 25.3: Evaluating the Fed’s Performance Before and After the Financial Crisis of 2008–09
    Exploring Further: More on the Velocity of Money
    Review and Practice

    Chapter 26: Controversies over Stabilization Policy
    Monetarists versus Keynesians: The Central Debate of the 1960s and 1970s
    Supply-Side Economists
    The New Classical Macroeconomists
    Case Study 26.1: Inflation Targeting by Central Banks
    Unemployment and Business Fluctuations
    Case Study 26.2: Recession as a Means to Stop Inflation in 1982
    Real Business Cycle Models
    The New Keynesians
    Menu Costs and Sticky Prices
    Long-Term Labor Contracts and Sticky Wages
    Implicit Contracts
    Policy Activism: Pros and Cons
    Policy Rules and Time Inconsistency
    **Case Study 26.3: The Troubled Asset Relief Program (TARP)
    The New Keynesian Response
    Divergent Political Beliefs
    Review and Practice

    **Cross Chapter Case—Part 5: The Debate over Post-Crisis Fiscal Austerity

    Part Six: International Economics

    Chapter 27: International Trade
    Specialization and Trade
    Absolute Advantage
    Comparative Advantage
    The Terms of Trade
    Case Study 27.1: The Maquiladora Program—How the Impact of International Investment Is Very Similar to the Impact of International Trade
    International Trade and Individual Markets
    Tariffs and Quotas
    Arguments for Tariffs and Quotas
    Case Study 27.2: Restrictions on U.S. Imports of Japanese Autos
    Case Study 27.3: NAFTA: "Jobs, Jobs, Jobs" or a "Giant Sucking Sound"?
    Review and Practice

    Chapter 28: Exchange Rates and the Balance of Payments

    International Transactions and Exchange Rates
    Exchange Rates under the Gold Standard
    The Foreign Exchange Market
    Fixed Exchange Rates
    Balance of Payments Deficits and Surpluses
    Exchange Rates: Pre-World War II Experience
    The Gold Exchange Standard
    Case Study 28.1: The Abandonment of the Gold Standard
    Fixed versus Flexible Exchange Rates
    Case Study 28.2: Are Currency Speculators to Blame for the Volatility in International Financial Markets?
    How Well Have Floating Exchange Rates Worked?
    Case Study 28.3: The Rise and Fall of the Bretton Woods System
    Case Study 28.4: The Euro: Europe’s Single Currency
    Should the Value of the Dollar Be Stabilized?
    Review and Practice

    **Cross Chapter Case—Part 6: Should We Be Worried about the Rise of China, India, and Other Emerging Markets?

    Glossary
    Index