Economics [antikvár]

PREFACE This new edition has again been substantially revised both in content and organization. However, the basic change made in the third edition has been retained: microeconomics is treated ahead of macroeconomics, thus retaining several important advantages: • It facilitates the macroeconomic analysis of inflation to have first analysed diminishing returns and increasing costs at the micro level. • It permits the division of the book into two volumes, with Volume I, Microeconomics, being published first in February 1987—followed by Volume II, Macroeconomics, by the end of April, as soon as the 1986 statistics can be fed in. Thus summer 1987 courses and the academic year starting in September 1987 will have the choice of a combined single-volume hardcover text and a paperback two-volume split, both of which contain macroeconomic national accounts statistics of the previous year, 1986, rather than of 1985. The basic purpose of the text remains the same: to introduce the beginning economics student to those principles essential to an understanding of fundamental economic problems and the policy alternatives society may utilize to contend with these problems. It is hoped that the ability to reason accurately and objectively about economic matters and the development of a lasting interest in economics will be two valuable byproducts of this basic objective. Our intention remains that of presenting the principles and problems of economics in a straightforward, logical fashion. To this end great stress has been put upon clarity of presentation and organization. The ensuing comments exclude minor rewriting, the updating of examples and illustrations, and the revitalization of pedagogical aids that characterize virtually every chapter. VOLUME I: MICROECONOMICS Part 1/An Introduction to Economics The two-chapter length of the introduction has been retained, permitting a speedy entry into the study of microeconomics or macroeconomics, depending on the preference of the instructor. Part 2/The Economics of the Firm We have purposely given considerable attention to microeconomics in general and to the theory of the firm in particular. There are two reasons for this emphasis. In the first place, the concepts of microeconomics are difficult for most beginning students. Short expositions usually compound these difficulties by raising more questions than they answer. Secondly, we have coupled analysis of the various market structures with a discussion of the social implications of each. The impact of each market arrangement upon price and output levels, resource allocation, and the rate of technological advance is carefully assessed. Chapter 3 contains new material on the nature of markets and has two new tables to illustrate in more detail the determinants of demand and supply. There is some rewrite of the section on prices fixed by law for clarity and to stress definitions. Also, a new Last Word on cross- and income-elasticities is included for those who choose to go beyond the price-elasticity concept. In Chapter 4 the income and substitution effects are more closely tied to the derivation of the demand curve from utility data. The third edition ordering of Chapters 5 and 6 has been reversed in the present edition, allowing both a more logical sequence and avoidance of repetition. In Chapter 6 the section on returns to scale has been reworked and the concept of minimum efficient scale is introduced. In Chapter 7 the description of the benefits of the com-