Intermediate Microeconomic Theory – Walter Nicholson

103 Pages·2009·2.84 MB·English

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Intermediate Microeconomics sit
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and Its Application bl
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WA LT ER N I CH OLS O N ve
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AMHERSTCOLLEGE es
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o IntermediateMicroeconomics,Eleventh ª2010,2007South-Western,CengageLearning
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wh ALLRIGHTSRESERVED.Nopartofthisworkcoveredbythe
WalterNicholsonandChristopherSnyder
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TO ELIZABETH, SARAH, DAVID, SOPHIA, ABIGAIL, u
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NATHANIEL, AND CHRISTOPHER a
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WalterNicholson A sted
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TO CLARE, TESS, AND MEG ed,
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rt. About the Authors
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si Walter Nicholson Walter Nicholson is the Ward H. Patton Professor of
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c EconomicsatAmherstCollege.HereceivedaB.A.inmathematicsfromWilliams
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CollegeandaPh.D.ineconomicsfromtheMassachusettsInstituteofTechnology
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blicl (MIT). Professor Nicholson’s primary research interests are in the econometric
u analyses of labor market problems, including welfare, unemployment, and the
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a impact of international trade. For many years, he has been Senior Fellow at
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t Mathematica,Inc.andhasservedasanadvisortotheU.S.andCanadianL govern-
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ste ments.Heandhiswife,Susan,liveinNaples,Florida,andAmhAerst,Massachusetts.
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p ChristopherSnyder ChristopherSnyderisaProfessorofEconomicsatDart-
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mouthCollege.HereceivedhisB.A.ineconomicsandmathematicsfromFordham
ed, UniversityandhisPh.D.ineconomicsfromM IT.BeforecomingtoDartmouthin
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c 2005, he taught at George Washington University for over a decade, and he has
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u been a visiting professor aOt the University of Chicago and MIT. He is a past
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r PresidentoftheIndustrialOrganizationSocietyandAssociateEditoroftheInter-
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d national Journal ofFIndustrial Organization and Review of Industrial Organiza-
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opi tion. His res earch covers various theoretical and empirical topics in industrial
c organizaTtion,contracttheory,andlawandeconomics.
d,
e O Professor Snyder and his wife, Maura Doyle (who also teaches economics at
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n Dartmouth),livewithinwalkingdistanceofcampusinHanover,NewHampshire,
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s N withtheir3daughters,ranginginagefrom7to12.
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Preface xxvii si
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PART 1 INTRODUCTION 1
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cl
CHAPTER1 EconomicModels3 bli
u
AppendixtoChapter1: MathematicsUsedinMicroeconomics26 E p
a
o
L t
PART 2 DEMAND 51 d
A ste
CHAPTER2 UtilityandChoice53 o
p
CHAPTER3 DemandCurves87 S or
ed,
PART 3 UNCERTAINTY AND STRATEGY 1R37 at
c
pli
CHAPTER4 Uncertainty139 O u
d
CHAPTER5 GameTheory175 r
o
F d
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PART 4 PRODUCTIO N, COSTS, AND SUPPLY 213 opi
T c
CHAPTER6 Production215 d,
O e
CHAPTER7 Costs243 n
n
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CHAPTER8 ProfitMaximizationandSupply274 c
s
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PART 5 PERFECT COMPETITION 301 ot
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CHAPTER9 PerfectCompetitioninaSingleMarket303 ay
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CHAPTER10 GeneralEquilibriumandWelfare345
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e
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PART 6 MARKET POWER 375 r
e
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CHAPTER11 Monopoly377
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CHAPTER12 ImperfectCompetition408 ht
g
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PART 7 INPUT MARKETS 449 All
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CHAPTER13 PricinginInputMarkets451 n
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AppendixtoChapter13: LaborSupply478 r
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CHAPTER14 CapitalandTime487 Le
AppendixtoChapter14: CompoundInterest509 ge
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rt. viii BRIEF CONTENTS
a
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o PART 8 MARKET FAILURES 527
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h CHAPTER15 AsymmetricInformation529
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n CHAPTER16 ExternalitiesandPublicGoods566
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e, CHAPTER17 BehavioralEconomics601
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w Glossary 637
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bl Index 645
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PART 1 INTRODUCTION 1 si
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CHAPTER1 EconomicModels 3 ac
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WhatIsMicroeconomics? 4 cl
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AFewBasicPrinciples 5 u
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UsesofMicroeconomics 7 E a
Application1.1:EconomicsintheNaturalWorld? 8 L to
d
Application1.2:IsItWorthYourTimetoBeHere? 9 A ste
TheBasicSupply-DemandModel 10 o
p
AdamSmithandtheInvisibleHand 10 S r
o
Application1.3:RemakingBlockbuster 11 ed,
DavidRicardoandDiminishingReturns 13R at
c
MarginalismandMarshall’sModelofSupplyandDemand 13 pli
MarketEquilibrium 15 O du
NonequilibriumOutcomes 15 or
ChangeinMarketEquFilibrium 15 ed
HowEconomists VerifyTheoreticalModels 16 opi
T c
TestingAssumptions 17 d,
OTestingPredictions 17 ne
n
Application1.4:EconomicsAccordingtoBono 18 a
c
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N ThePositive-NormativeDistinction 19 e
b
Application1.5:DoEconomistsEverAgreeonAnything? 20 ot
Summary 21 n
y
ReviewQuestions 21 Ma
Problems 22 d.
AppendixtoChapter1 MathematicsUsedinMicroeconomics 26 ve
r
FunctionsofOneVariable 26 se
e
GraphingFunctionsofOneVariable 28 R
s
LinearFunctions:InterceptsandSlopes 28 ht
g
InterpretingSlopes:AnExample 29 Ri
SlopesandUnitsofMeasurement 30 All
ChangesinSlope 31 g.
NonlinearFunctions 32 nin
TheSlopeofaNonlinearFunction 33 ar
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Application1A.1:HowDoesZillow.comDoIt? 34 L
e
MarginalandAverageEffects 35 ag
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CalculusandMarginalism 36 n
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