Modern Principles of Microeconomics

Big Idea One: Incentives Matter · Big Idea Two: Good Institutions Align Self-Interest with the Social Interest · Big Idea Three: Trade-offs Are Everywhere · Big Idea Four: Think on the Margin

Trade and Preferences · Specialization, Productivity, and the Division of Knowledge · Comparative Advantage · Trade and Globalization

The Demand Curve for Oil · Consumer Surplus · What Shifts the Demand Curve? · The Supply Curve for Oil

Equilibrium and the Adjustment Process · A Free Market Maximizes Producer Plus Consumer Surplus (the Gains from Trade) · Does the Model Work? Evidence from the Laboratory · Shifting Demand and Supply Curves

The Elasticity of Demand · Applications of Demand Elasticity · The Elasticity of Supply · Applications of Supply Elasticity

Commodity Taxes · Who Ultimately Pays the Tax Does Not Depend on Who Writes the Check · Who Ultimately Pays the Tax Depends on the Relative Elasticities of Supply and Demand · A Commodity Tax Raises Revenue and Reduces the Gains from Trade (Creates a Deadweight Loss)

Markets Link the World · Markets Link to One Another · Solving the Great Economic Problem · A Price Is a Signal Wrapped Up in an Incentive

Price Ceilings · Rent Controls · Arguments for Price Ceilings · Universal Price Controls

Analyzing Trade with Supply and Demand · The Costs of Protectionism · International Trade and Jobs · The Washing Machine Tariffs

External Costs, External Benefits, and Efficiency · Private Solutions to Externality Problems · Government Solutions to Externality Problems

What Price to Set? · Maximizing Profits · What Quantity to Produce? · Profits and the Average Cost Curve

Invisible Hand Property 1: The Minimization of Total Industry Costs of Production · Invisible Hand Property 2: The Balance of Industries · Creative Destruction · The Invisible Hand Works with Competitive Markets

Market Power · How a Firm Uses Market Power to Maximize Profit · The Costs of Monopoly: Deadweight Loss · The Costs of Monopoly: Corruption and Inefficiency

Price Discrimination · Price Discrimination Is Common · Is Price Discrimination Bad? · Tying and Bundling

Cartels · The Prisoner's Dilemma · Oligopolies · When Are Cartels and Oligopolies Most Successful?

Network Goods Are Usually Sold by Monopolies or Oligopolies · The "Best" Product May Not Always Win · Competition Is "For the Market" Instead of "In the Market" · Music Is a Network Good

Sources of Product Differentiation · The Monopolistic Competition Model · The Economics of Advertising

The Demand for Labor and the Marginal Product of Labor · Supply of Labor · Labor Market Issues · How Bad Is Labor Market Discrimination, or Can Lakisha Catch a Break?

Four Types of Goods · Private Goods and Public Goods · Club Goods · Common Resources and the Tragedy of the Commons

Voters and the Incentive to Be Ignorant · Special Interests and the Incentive to Be Informed · A Formula for Political Success: Diffuse Costs, Concentrate Benefits · Voter Myopia and Political Business Cycles

The Case for Exporting Pollution and Importing Kidneys · Exploitation · Meddlesome Preferences · Fair and Equal Treatment

Lesson One: You Get What You Pay For · Lesson Two: Tie Pay to Performance to Reduce Risk · Lesson Three: Money Isn't Everything · Lesson Four: Nudges Can Work

Passive vs. Active Investing · Why Is It Hard to Beat the Market? · How to Really Pick Stocks, Seriously · Other Benefits and Costs of Stock Markets

Moral Hazard · Adverse Selection · Signaling as a Response to Asymmetric Information

How to Compare Apples and Oranges · The Demand Curve · The Budget Constraint · Preferences and Indifference Curves