Out of the Shadows: Fred West's Daughter Tells Her Harrowing Story of Survival

Cover Half Title Title Page Copyright Dedication About The Authors Brief Contents Contents Preface Part 1: Introduction Chapter 1: Economics: Foundationsand Models Does Apple Manufacture the iPhone in the United States? 1.1 Three Key Economic Ideas People Are Rational People Respond to Economic Incentives Apply the Concept: Would a Congressional Bill Aimed at Increasing the Pay of Low-Wage Workers Backfire? Optimal Decisions Are Made at the Margin Solved Problem 1.1: The Marginal Benefit and Marginal Cost of Delivering Packages for Amazon 1.2 The Economic Problem That Every Society Must Solve What Goods and Services Will Be Produced? How Will the Goods and Services Be Produced? Who Will Receive the Goods and Services Produced? Centrally Planned Economies versus Market Economies The Modern “Mixed” Economy Efficiency and Equity 1.3 Economic Models The Role of Assumptions in Economic Models Forming and Testing Hypotheses in Economic Models Positive and Normative Analysis Don’t Let This Happen to You: Don’t Confuse Positive Analysis with Normative Analysis Economics as a Social Science Apply the Concept: What Can Economics Contribute to the Debate over Tariffs? 1.4 Microeconomics and Macroeconomics 1.5 Economic Skills and Economics as a Career 1.6 A Preview of Important Economic Terms Conclusion An Inside Look: Are Tariffs Bringing Manufacturing Jobs Back Home or Just Raising Prices? *Chapter Summary and Problems Appendix: Using Graphs and Formulas Graphs of One Variable Graphs of Two Variables Slopes of Lines Taking into Account More Than Two Variables on a Graph Positive and Negative Relationships Determining Cause and Effect Are Graphs of Economic Relationships Always Straight Lines? Slopes of Nonlinear Curves Formulas Formula for a Percentage Change Formulas for the Areas of a Rectangle and a Triangle Summary of Using Formulas Problems and Applications Chapter 2: Trade-offs, Comparative Advantage, and the Market System Elon Musk and Tesla Motors Face a Trade-off 2.1 Production Possibilities Frontiers and Opportunity Costs Graphing the Production Possibilities Frontier Solved Problem 2.1: Analyzing Trade-offs Using a Production Possibilities Frontier for Tesla Motors Increasing Marginal Opportunity Costs Economic Growth 2.2 Comparative Advantage and Trade Specialization and Gains from Trade Absolute Advantage versus Comparative Advantage Comparative Advantage and the Gains from Trade Don’t Let This Happen to You: Don’t Confuse Absolute Advantage and Comparative Advantage Solved Problem 2.2: Comparative Advantage and the Gains from Trade Apply the Concept: Comparative Advantage, Opportunity Cost, and Housework 2.3 The Market System The Circular Flow of Income The Gains from Free Markets The Market Mechanism Apply the Concept: A Story of the Market System in Action: How Do You Make an iPad? The Role of the Entrepreneur in the Market System The Legal Basis of a Successful Market System Apply the Concept: What Is Socialism? Conclusion An Inside Look: A Plug-in Porsche? Chapter Summary and Problems Chapter 3: Where Prices Come From: The Interaction of Demand and Supply A Basketball Player Takes a Tumble—And So Does Nike 3.1 The Demand Side of the Market Demand Schedules and Demand Curves The Law of Demand What Explains the Law of Demand? Holding Everything Else Constant: The Ceteris Paribus Condition Variables That Shift Market Demand Apply the Concept: Millennials and Generation Z Shake Up the Markets for Groceries, Big Macs, and Running Shoes A Change in Demand versus a Change in Quantity Demanded Apply the Concept: Forecasting the Demand for Athletic Shoes 3.2 The Supply Side of the Market Supply Schedules and Supply Curves The Law of Supply Variables That Shift Market Supply Apply the Concept: Fracking, the U.S. Oil Boom, and Expected Oil Prices A Change in Supply versus a Change in Quantity Supplied 3.3 Market Equilibrium: Putting Demand and Supply Together How Markets Eliminate Surpluses and Shortages Demand and Supply Both Count Solved Problem 3.3: Demand and Supply Both Count: A Tale of Two Letters 3.4 The Effect of Demand and Supply Shifts on Equilibrium The Effect of Shifts in Demand on Equilibrium The Effect of Shifts in Supply on Equilibrium The Effect of Shifts in Demand and Supply over Time Apply the Concept: Higher Demand for Cobalt—But Lower Prices? Solved Problem 3.4: Can We Predict Changes in the Price and Quantity of Merino Wool? Shifts in a Curve versus Movements along a Curve Don’t Let This Happen to You: Remember: A Change in a Good’s Price Does Not Cause the Demand or Supply Curve to Shift Conclusion An Inside Look: If the Shoe Fits . . . Print It? Chapter Summary and Problems Chapter 4: Economic Efficiency, Government Price Setting, and Taxes What Do Food Riots in Venezuela and the Rise of Uber in the United States Have in Common? 4.1 Consumer Surplus and Producer Surplus Consumer Surplus Apply the Concept: The Consumer Surplus from Uber Producer Surplus What Consumer Surplus and Producer Surplus Measure 4.2 The Efficiency of Competitive Markets Marginal Benefit Equals Marginal Cost in Competitive Equilibrium Economic Surplus Deadweight Loss Economic Surplus and Economic Efficiency 4.3 Government Intervention in the Market: Price Floors and Price Ceilings Price Floors: Government Policy in Agricultural Markets Apply the Concept: Price Floors in Labor Markets: The Debate over Minimum Wage Policy Price Ceilings: Government Rent Control Policy in Housing Markets Don’t Let This Happen to You: Don’t Confuse“Scarcity” with “Shortage” Black Markets and Peer-to-Peer Sites Solved Problem 4.3: What’s the Economic Effect of a Black Market in Renting Apartments? The Results of Government Price Controls: Winners, Losers, and Inefficiency Apply the Concept: Price Controls Lead to Economic Crisis in Venezuela Positive and Normative Analysis of Price Ceilings and Price Floors 4.4 The Economic Effect of Taxes The Effect of Taxes on Economic Efficiency Tax Incidence: Who Actually Pays a Tax? Solved Problem 4.4: Who Bears the Burden of the Seattle Beverage Tax? Apply the Concept: Is the Burden of the Social Security Tax Really Shared Equally between Workers and Firms? Conclusion An Inside Look: Uber Fights to Repeal New York City Restrictions Chapter Summary and Problems Appendix: Quantitative Demand and Supply Analysis Demand and Supply Equations Calculating Consumer Surplus and Producer Surplus Review Questions Problems and Applications Part 2: Markets in Action: Policy and Applications Chapter 5: Externalities, Environmental Policy, and Public Goods Are NextEra Energy and Green Power the Future? 5.1 Externalities and Economic Efficiency The Effect of Externalities Externalities and Market Failure What Causes Externalities? 5.2 Private Solutions to Externalities: The Coase Theorem The Economically Efficient Level of Pollution Reduction Apply the Concept: The Clean Air Act: How a Government Policy Reduced Infant Mortality The Basis for Private Solutions to Externalities Don’t Let This Happen to You: Remember That It’s the Net Benefit That Counts Do Property Rights Matter? The Problem of Transactions Costs The Coase Theorem Apply the Concept: How Can You Defend Your Knees on a Plane Flight? 5.3 Government Policies to Deal with Externalities Imposing a Tax When There Is a Negative Externality Providing a Subsidy When There Is a Positive Externality Apply the Concept: Should the Government Tax Cigarettes and Soda? Solved Problem 5.3: Are Congestion Fees the Answer to Big City Traffic Problems? Command-and-Control versus Market-Based Approaches The End of the Sulfur Dioxide Cap-and-Trade System Are Tradable Emission Allowances Licenses to Pollute? Apply the Concept: Does the United States Need a Green New Deal? 5.4 Four Categories of Goods The Demand for a Public Good The Optimal Quantity of a Public Good Solved Problem 5.4: Determining the Optimal Level of Public Goods Common Resources Conclusion Chapter Summary and Problems Chapter 6: Elasticity: The Responsiveness of Demand and Supply Do Soda Taxes Work? 6.1 The Price Elasticity of Demand and Its Measurement Measuring the Price Elasticity of Demand Elastic Demand and Inelastic Demand An Example of Calculating Price Elasticities The Midpoint Formula Solved Problem 6.1: Calculating the Price Elasticity of Demand When Demand Curves Intersect, the Flatter Curve Is More Elastic Polar Cases of Perfectly Inelastic and Perfectly Elastic Demand Don’t Let This Happen to You: Don’t Confuse Inelastic with Perfectly Inelastic 6.2 The Determinants of the Price Elasticity of Demand Availability of Close Substitutes Passage of Time Luxuries versus Necessities Definition of the Market Share of a Good in a Consumer’s Budget Some Estimated Price Elasticities of Demand 6.3 The Relationship between Price Elasticity of Demand and Total Revenue Elasticity and Revenue with a Linear Demand Curve Solved Problem 6.3: Price and Revenue Don’t Always Move in the Same Direction Apply the Concept: Amazon and Netflix Test the Price Elasticity of Demand for Their Services 6.4 Other Demand Elasticities Cross-Price Elasticity of Demand Income Elasticity of Demand Apply the Concept: Price Elasticity, Cross-Price Elasticity, and Income Elasticity in the Market for Alcoholic Beverages 6.5 Using Elasticity to Analyze the Disappearing Family Farm Solved Problem 6.5: Using Price Elasticity to Analyze the Effects of a Soda Tax 6.6 The Price Elasticity of Supply and Its Measurement Measuring the Price Elasticity of Supply Determinants of the Price Elasticity of Supply Apply the Concept: Why Are Oil Prices So Unstable? Polar Cases of Perfectly Elastic and Perfectly Inelastic Supply Using Price Elasticity of Supply to Predict Changes in Price Conclusion Chapter Summary and Problems Chapter 7: The Economics of Health Care Goodbye to Blue Cross and Blue Shield? 7.1 The Improving Health of People in the United States Changes over Time in U.S. Health Reasons for Long-Run Improvements in U.S. Health 7.2 Health Care around the World The U.S. Health Care System Apply the Concept: The Increasing Importance of Health Care in the U.S. Economy The Health Care Systems of Canada, Japan, and the United Kingdom Comparing Health Care Outcomes around the World How Useful Are Cross-Country Comparisons of Health Outcomes? 7.3 Information Problems and Externalities in the Market for Health Care Adverse Selection and the Market for “Lemons” Asymmetric Information in the Market for Health Insurance Don’t Let This Happen to You: Don’t Confuse Adverse Selection with Moral Hazard Externalities in the Market for Health Care Should the Government Run the Health Care System? 7.4 The Debate over Health Care Policy in the United States The Rising Cost of Health Care Apply the Concept: Are U.S. Firms Handicapped by Paying for Their Employees’ Health Insurance? Explaining Increases in Health Care Spending The Continuing Debate over Health Care Policy Market-Based Reforms Apply the Concept: Medicare for All? Conclusion Chapter Summary and Problems Part 3: Firms in the Domestic and International Economies Chapter 8: Firms, the Stock Market, and Corporate Governance Investing in Lyft, a Company That Has Never Earned a Profit? 8.1 Types of Firms Who Is Liable? Limited and Unlimited Liability Corporations Earn the Majority of Revenue and Profits Apply the Concept: Why Are Fewer Young People Starting Businesses? The Structure of Corporations and the Principal–Agent Problem 8.2 How Firms Raise Funds Sources of External Funds Apply the Concept: The Rating Game: Are Federal, State, or City Governments Likely to Default on Their Bonds? Stock and Bond Markets Provide Capital—and Information The Fluctuating Stock Market Don’t Let This Happen to You: When Lyft Shares Are Sold, Lyft Doesn’t Get the Money Why Is It So Hard to Beat the Market? Apply the Concept: Why Would Anyone Buy Lyft’s Stock? Solved Problem 8.2: Why Does Warren Buffett Like Mutual Funds? 8.3 Using Financial Statements to Evaluate a Corporation The Income Statement The Balance Sheet Problems in Corporate Governance Apply the Concept: Should Investors Worry about Corporate Governance at Lyft? Conclusion Chapter Summary and Problems Appendix: Using Present Value The Concept of Present Value Solved Problem 8A.1: How to Receive Your Contest Winnings Using Present Value to Calculate Bond Prices Using Present Value to Calculate Stock Prices A Simple Formula for Calculating Stock Prices Review Questions Problems and Applications Online Appendix: Income Statements and Balance Sheets Chapter 9: Comparative Advantage and the Gains from International Trade Being Careful What You Wish For: Trade Wars and Whirlpool 9.1 The United States in the International Economy The Importance of Trade to the U.S. Economy U.S. International Trade in a World Context 9.2 Comparative Advantage in International Trade A Brief Review of Comparative Advantage Comparative Advantage and Absolute Advantage 9.3 How Countries Gain from International Trade Increasing Consumption through Trade Solved Problem 9.3: The Gains from Trade Why Don’t We See Complete Specialization? Does Anyone Lose as a Result of International Trade? Don’t Let This Happen to You: Remember That Trade Creates Both Winners and Losers Apply the Concept: Who Gains and Who Loses from U.S. Trade with China? Where Does Comparative Advantage Come From? 9.4 Government Policies That Restrict International Trade Tariffs Quotas and Voluntary Export Restraints Measuring the Economic Effect of the Sugar Quota Solved Problem 9.4: Measuring the Economic Effect of a Quota The High Cost of Preserving Jobs with Tariffs and Quotas Apply the Concept: Smoot-Hawley, the Politics of Tariffs, and the Cost of Protecting a Vanishing Industry Gains from Unilateral Elimination of Tariffs and Quotas Other Barriers to Trade 9.5 The Debate over Trade Policies and Globalization Why Do Some People Oppose the World Trade Organization? Dumping Apply the Concept: The Trade War of 2018 Positive versus Normative Analysis (Once Again) Conclusion Chapter Summary and Problems Part 4: Microeconomic Foundations:Consumers and Firms Chapter 10: Consumer Choice andBehavioral Economics What Happened to Sears and the Other Department Stores? 10.1 Utility and Consumer Decision Making An Overview of the Economic Model of Consumer Behavior Utility The Principle of Diminishing Marginal Utility The Rule of Equal Marginal Utility per Dollar Spent Solved Problem 10.1: Finding the Optimal Level of Consumption What if the Rule of Equal Marginal Utility per Dollar Does Not Hold? Don’t Let This Happen to You: Equalize Marginal Utilities per Dollar The Income Effect and Substitution Effect of a Price Change Don’t Let This Happen to You: The Income Effect Doesn’t Involve an Increase in Money Income 10.2 Where Demand Curves Come From Apply the Concept: Are There Any Upward-Sloping Demand Curves in the Real World? 10.3 Social Influences on Decision Making The Effects of Celebrity Endorsements Network Externalities Does Fairness Matter? Apply the Concept: Taylor Swift Tries to Please Fans and Make Money Solved Problem 10.3: Why Doesn’t Tesla Charge Its Employees to Park Their Cars? 10.4 Behavioral Economics: Do People Make Rational Choices? Pitfalls in Decision Making Apply the Concept: Sunk Costs and Sports Teams “Nudges”: Using Behavioral Economics to Guide Behavior The Behavioral Economics of Shopping Apply the Concept: Trying to Use the Apple Approach to Save J.C. Penney Conclusion Chapter Summary and Problems Appendix: Using Indifference Curves and Budget Lines to Understand Consumer Behavior Consumer Preferences Indifference Curves The Slope of an Indifference Curve Can Indifference Curves Ever Cross? The Budget Constraint Choosing the Optimal Consumption of Pizza and Coke Apply the Concept: Apple Determines the Optimal Mix of iPhone Features Deriving the Demand Curve Solved Problem 10A.1: When Does a Price Change Make a Consumer Better Off? The Income Effect and the Substitution Effect of a Price Change How a Change in Income Affects Optimal Consumption The Slope of the Indifference Curve, the Slope of the Budget Line, and the Rule of Equal Marginal Utility per Dollar Spent The Rule of Equal Marginal Utility per Dollar Spent Revisited Review Questions Problems and Applications Chapter 11: Technology, Production, and Costs Fracking Lowers the Cost of Oil and Revolutionizes the World Market 11.1 Technology: An Economic Definition Apply the Concept: Oil Roughnecks Encounter Robots and Drones 11.2 The Short Run and the Long Run in Economics The Difference between Fixed Costs and Variable Costs Apply the Concept: Fixed Costs in the Publishing Industry Implicit Costs versus Explicit Costs The Production Function A First Look at the Relationship between Production and Cost 11.3 The Marginal Product of Labor and the Average Product of Labor The Law of Diminishing Returns Graphing Production Apply the Concept: Adam Smith’s Famous Account of the Division of Labor in a Pin Factory The Relationship between Marginal Product and Average Product An Example of Marginal and Average Values: College Grades 11.4 The Relationship between Short-Run Production and Short-Run Cost Marginal Cost Why Are the Marginal and Average Cost Curves U Shaped? Solved Problem 11.4: Calculating Marginal Cost and Average Total Cost 11.5 Graphing Cost Curves 11.6 Costs in the Long Run Economies of Scale Long-Run Average Cost Curves for Automobile Factories Solved Problem 11.6: Using Long-Run Average Cost Curves to Understand a Business Merger Apply the Concept: The Colossal River Rouge: Diseconomies of Scale at Ford Motor Company Don’t Let This Happen to You: Don’t Confuse Diminishing Returns with Diseconomiesof Scale Conclusion Chapter Summary and Problems Online Appendix: Using Isoquants and Isocost Lines to Understand Production and Cost Part 5: Market Structure and Firm Strategy Chapter 12: Firms in Perfectly CompetitiveMarkets Are Cage-Free Eggs the Road to Riches? 12.1 Perfectly Competitive Markets A Perfectly Competitive Firm Cannot Affect the Market Price The Demand Curve for the Output of a Perfectly Competitive Firm Don’t Let This Happen to You: Don’t Confuse the Demand Curve for Farmer Parker’s Wheat with the Market Demand Curve for Wheat 12.2 How a Firm Maximizes Profit in a Perfectly Competitive Market Revenue for a Firm in a Perfectly Competitive Market Determining the Profit-Maximizing Level of Output 12.3 Illustrating Profit or Loss on the Cost Curve Graph Showing Profit on a Graph Solved Problem 12.3: Determining Profit-Maximizing Price and Quantity Don’t Let This Happen to You: Remember That Firms Maximize Their Total Prof it, Not Their Prof it per Unit Illustrating When a Firm Is Breaking Evenor Operating at a Loss 12.4 Deciding Whether to Produce or to Shut Down in the Short Run The Supply Curve of a Firm in the Short Run Apply the Concept: What Does “Break Even” Mean in the Oil Fields? Solved Problem 12.4: When to Shut Down a Farm The Market Supply Curve in a Perfectly Competitive Industry 12.5 “If Everyone Can Do It, You Can’t Make Money at It”: The Entry and Exit of Firms in the Long Run Economic Profit and the Entry or Exit Decision Long-Run Equilibrium in a Perfectly Competitive Market The Long-Run Supply Curve in a Perfectly Competitive Market Apply the Concept: The Winding Path to Long-Run Equilibrium in the Egg Market Increasing-Cost and Decreasing-Cost Industries 12.6 Perfect Competition and Economic Efficiency Productive Efficiency Solved Problem 12.6: How Productive Efficiency Benefits Consumers Allocative Efficiency Conclusion Chapter Summary and Problems Chapter 13: Monopolistic Competition: The Competitive Model in a More Realistic Setting The Coffee Industry: From Supermarket Cans to Third Wave Coffeehouse 13.1 Demand and Marginal Revenue for a Firm in a Monopolistically Competitive Market The Demand Curve for a Monopolistically Competitive Firm Marginal Revenue for a Firm with a Downward-Sloping Demand Curve 13.2 How a Monopolistically Competitive Firm Maximizes Profit in the Short Run Solved Problem 13.2: Does Minimizing Cost Maximize Profit at Apple? 13.3 What Happens to Profits in the Long Run? How Does the Entry of New Firms Affect the Profits of Existing Firms? Don’t Let This Happen to You: Don’t Confuse Zero Economic Profit with Zero Accounting Profit Apply the Concept: Can Third Wave Coffeehouses Remain Profitable? Is Zero Economic Profit Inevitable in the Long Run? Solved Problem 13.3: The Profitability of Amazon Go 13.4 Comparing Monopolistic Competition and Perfect Competition Excess Capacity under Monopolistic Competition Is Monopolistic Competition Inefficient? How Consumers Benefit from Monopolistic Competition Apply the Concept: Are Ghost and Virtual Restaurants the Wave of the Future? 13.5 How Marketing Differentiates Products Brand Management Advertising Defending a Brand Name 13.6 What Makes a Firm Successful? Apply the Concept: Is Being the First Firm in the Market a Key to Success? Conclusion Chapter Summary and Problems Chapter 14: Oligopoly: Firms in LessCompetitive Markets Apple, Spotify, and the Music Streaming Revolution 14.1 Oligopoly and Barriers to Entry Barriers to Entry Apply the Concept: Are Unlicensed Yoga Instructors a Menace to Public Health? 14.2 Game Theory and Oligopoly A Duopoly Game: Price Competition between Two Firms Firm Behavior and the Prisoner’s Dilemma Don’t Let This Happen to You: Don’t Misunderstand Why Each Firm Ends Up Charging a Price of $9.99 Solved Problem 14.2: Is Offering a College Student Discount a Prisoner’s Dilemma for Apple and Spotify? Can Firms Escape the Prisoner’s Dilemma? Apply the Concept: Are the Big Four Airlines Colluding? Cartels: The Case of OPEC 14.3 Sequential Games and Business Strategy Deterring Entry Solved Problem 14.3: Is Deterring EntryAlways a Good Idea? Bargaining 14.4 The Five Competitive Forces Model Competition from Existing Firms The Threat from Potential Entrants Competition from Substitute Goods or Services The Bargaining Power of Buyers The Bargaining Power of Suppliers Apply the Concept: Do Large Firms Live Forever? Conclusion Chapter Summary and Problems Chapter 15: Monopoly and Antitrust Policy The Monopoly in Your Mailbox 15.1 Is Any Firm Ever Really a Monopoly? Apply the Concept: Has the USPS Outlived Its Usefulness? 15.2 Where Do Monopolies Come From? Government Action Blocks Entry Apply the Concept: Does Hasbro Have a Monopoly on Monopoly? Control of a Key Resource Apply the Concept: Are Diamond Profits Forever? The De Beers Diamond Monopoly Network Externalities Natural Monopoly 15.3 How Does a Monopoly Choose Price and Output? Marginal Revenue Once Again Profit Maximization for a Monopolist Solved Problem 15.3: Finding the Profit-Maximizing Price and Output for a Cable Monopoly Don’t Let This Happen to You: Don’t Assume That Charging a Higher Price Is Always More Prof itable for a Monopolist 15.4 Does Monopoly Reduce Economic Efficiency? Comparing Monopoly and Perfect Competition Measuring the Efficiency Losses from Monopoly How Large Are the Efficiency Losses Due to Monopoly? Market Power and Technological Change 15.5 Price Discrimination: Charging Different Prices for the Same Product The Requirements for Successful Price Discrimination An Example of Price Discrimination Don’t Let This Happen to You: Don’t Confuse Price Discrimination with Other Types of Discrimination Solved Problem 15.5: How Apple Uses Price Discrimination to Increase Profits Airlines: The Kings of Price Discrimination Big Data and Dynamic Pricing Perfect Price Discrimination Price Discrimination across Time Can Price Discrimination Be Illegal? 15.6 Government Policy toward Monopoly Antitrust Laws and Antitrust Enforcement Mergers: The Trade-off between Market Power and Efficiency The Department of Justice and FTC Merger Guidelines and the Herfindahl-Hirschman Index of Concentration Regulating Natural Monopolies Apply the Concept: Should the Justice Department Break Up Google, Amazon, and Facebook? Conclusion Chapter Summary and Problems Part 6: Labor Markets, Public Choice, and the Distribution of Income Chapter 16: The Markets for Labor and Other Factors of Production Great Hamburger? Thank a Robot 16.1 The Demand for Labor The Marginal Revenue Product of Labor Solved Problem 16.1: Hiring Decisions by a Firm That Is a Price Maker The Market Demand Curve for Labor Factors That Shift the Market Demand Curve for Labor 16.2 The Supply of Labor The Market Supply Curve of Labor Factors That Shift the Market Supply Curveof Labor 16.3 Equilibrium in the Labor Market The Effect on Equilibrium Wages of a Shift in Labor Demand Apply the Concept: Does It Matter Which College You Attend? The Effect of Immigration on the U.S. Labor Market Apply the Concept: Will You Compete with a Robot for a Job—Or Work with One? 16.4 Explaining Differences in Wages Don’t Let This Happen to You: Remember That Prices and Wages Are Determined at the Margin Apply the Concept: Technology and the Earnings of “Superstars” Compensating Differentials Discrimination Solved Problem 16.4: Is Passing “Comparable Worth” Legislation a Good Way to Close the Gap between Men’s and Women’s Pay? Apply the Concept: Does Greg Have an Easier Time Finding a Job Than Jamal? Labor Unions 16.5 Personnel Economics Should Workers’ Pay Depend on How Much They Work or on How Much They Produce? Apply the Concept: A Better Way to Sell Contact Lenses Other Considerations in Setting Compensation Systems 16.6 The Markets for Capital and Natural Resources The Market for Capital The Market for Natural Resources Monopsony The Marginal Productivity Theory of Income Distribution Conclusion Chapter Summary and Problems Chapter 17: Public Choice, Taxes, and the Distribution of Income Should Your Small Business Be Taxed Like Apple? 17.1 Public Choice How Do We Know the Public Interest? Models of Voting Government Failure? Is Government Regulation Necessary? 17.2 The Tax System An Overview of the U.S. Tax System Progressive and Regressive Taxes Apply the Concept: Which Groups Pay the Most in Federal Taxes? Marginal and Average Income Tax Rates The Corporate Income Tax International Comparison of Corporate Income Taxes Evaluating Taxes Apply the Concept: Should the Federal Government Begin to Tax Wealth? 17.3 Tax Incidence Revisited: The Effect of Price Elasticity Don’t Let This Happen to You: Don’t Confuse Who Pays a Tax with Who Bears the Burden of the Tax Apply the Concept: Do Corporations Really Bear the Burden of the Federal Corporate Income Tax? Solved Problem 17.3: The Effect of Price Elasticity on the Excess Burden of a Tax 17.4 Income Distribution and Poverty Measuring the Income Distribution and Measuring Poverty Showing the Income Distribution with a Lorenz Curve Problems in Measuring Poverty and the Distribution of Income Explaining Income Inequality Policies to Reduce Income Inequality Apply the Concept: Who Are the 1 Percent, and How Do They Earn Their Incomes? Poverty around the World Conclusion Chapter Summary and Problems Part 7: Macroeconomic Foundations and Long-Run Growth Chapter 18: GDP: Measuring Total Production and Income Politics, Macroeconomics, and General Motors 18.1 Gross Domestic Product Measures Total Production Measuring Total Production: Gross Domestic Product Solved Problem 18.1: Calculating GDP Production, Income, and the Circular-Flow Diagram Components of GDP Don’t Let This Happen to You: Remember What Economists Mean by Investment An Equation for GDP and Some Actual Values Apply the Concept: Microsoft’s Steve Ballmer Uses the U.S. Constitution to Reorganize Government Data Measuring GDP Using the Value-Added Method 18.2 Does GDP Measure What We Want It to Measure? Shortcomings in GDP as a Measure of Total Production Apply the Concept: Why Do Many Developing Countries Have Such Large Underground Economies? Shortcomings of GDP as a Measure of Well-Being 18.3 Real GDP versus Nominal GDP Calculating Real GDP Solved Problem 18.3: Calculating Real GDP Comparing Real GDP and Nominal GDP The GDP Deflator 18.4 Other Measures of Total Production and Total Income Gross National Product National Income Personal Income Disposable Personal Income The Division of Income Apply the Concept: Should We Pay More Attention to Gross Domestic Income? Conclusion Chapter Summary and Problems Chapter 19: Unemployment and Inflation Former Inmates and Stoughton Trailers Meet in a High-Pressure Economy 19.1 Measuring the Unemployment Rate, the Labor Force Participation Rate, and the Employment–Population Ratio The Household Survey Solved Problem 19.1: What Happens if the BLS Includes the Military? Problems with Measuring the Unemployment Rate Unemployment Rates for Different Groups How Long Are People Typically Unemployed? Trends in Labor Force Participation Apply the Concept: How Large Is the Potential U.S. Labor Force? The Establishment Survey: Another Measure of Employment Revisions in the Establishment Survey Employment Data: How Bad Was the 2007–2009 Recession? Job Creation and Job Destruction over Time 19.2 Types of Unemployment Frictional Unemployment and Job Search Structural Unemployment Cyclical Unemployment Full Employment Apply the Concept: Will Advances in Information Technology Permanently Increase Structural Unemployment? 19.3 Explaining Unemployment Government Policies and the Unemployment Rate Labor Unions Efficiency Wages 19.4 Measuring Inflation The Consumer Price Index Is the CPI Accurate? Don’t Let This Happen to You: Don’t Miscalculate the Inflation Rate The Producer Price Index 19.5 Using Price Indexes to Adjust for the Effects of Inflation Solved Problem 19.5: What Has Been Happening to Real Wages in the United States? 19.6 Nominal Interest Rates versus Real Interest Rates 19.7 Does Inflation Impose Costs on the Economy? Inflation Affects the Distribution of Income The Problem with Anticipated Inflation The Problem with Unanticipated Inflation Apply the Concept: What’s So Bad about Falling