734 • INDEX Congleton, Roger D., 379n12 Constant-cost industries, 307–308 Constant returns to scale, 223 Constant sum game,488n2 Constrained optimization, 149 Consumer behavior See also Consumer preferences assumptions and, 68–70 budget constraints and, 82–86 consumer choice and, 86–92 consumer preferences, 69–82 corner solutions and, 89–90 cost-of-living indexes and, 100–105 marginal utility and consumer choice, 95–100 price supports and, 332 revealed preference and, 92–95 steps and, 68 theory of, 67–68 trade-offs and, Consumer choice, 86–92 Consumer expenditures price elasticity and, 126–128 in United States, 117–118 Consumer groups, creation of, 405–406 Consumer investment decisions, 578–580 Consumer preferences, 69–82 See also Consumer behavior basic assumptions about, 70 completeness and, 70 fairness and, 192–194 framing, 191 health care choices, 90–91 indifference curves and, 71–72 indifference maps and, 72–73 marginal rate of substitution and, 74–75 market baskets and, 69–70 more vs less and, 70 perfect substitutes and perfect complements and, 75–77 reference points and, 190–191 transitivity and, 70 Consumer Price Index (CPI), 12, 100, 105 Consumer satisfaction maximization, 86–88 Consumer surplus, 132–135, 318–323 application of, 134 capturing, 400–401 change in, 319–320 demand and, 132–134 generalized, 133 Consumption decisions See also Bundling products bundled, 421 products sold separately, 421 Contract curve, 606–607 Convenience stores advertising and, 432–433 markup pricing and, 372–373 Cooper, John C B., 55n18 Cooperative games, 488–489 Cooperatives, 283–284 Cooter, Robert, 685n19 Cootner, Paul H., 46n12 Copper price of, 29–30, 52–54 short-run world supply of, 297–298 supply and demand for, 53 supply of, 45–46 Copyrights, 376 Corner solutions, 89–90 Corporate bonds versus prime rate, 475 rates and, 590 yields on, 567–569 Corporate takeovers, 646 Corts, Kenneth S., 241n5 Cost-benefit comparison, 640–641 Cost constraints, production and, 202 Cost curves, 238–240 Cost functions, 265–269 Cost minimization, 249–250, 273–274 Cost-of-living adjustments, 102 Cost-of-living indexes, 100–105 chain weighting and, 104 ideal, 101–102 Laspeyres index, 102–103 Paasche index, 103–104 Cost-reducing innovation, 515 Costs See Production costs Cost theory, duality in, 275–276 Coughlin, Cletus, 622n9 Coupons, economics of, 408–409 Cournot, Augustin, 458 Cournot equilibrium, 460–461, 464–465 Cournot model, 458–461 equilibrium in, 460–461 linear demand curve and, 461–463 reaction curves and, 460 Cournot-Nash equilibrium, 460 Cramer, Gail L., 343n13 Crandall, Robert, 392, 502 Crawfish fishing in Louisiana, 689–690 Credibility, 506–508 Credit market, adverse selection and, 635 Cremers, Martjin, 648n14 Crime deterrence, 164–165 Cross-price elasticity of demand, 35 Crude oil, price of, 55 Cubic cost function, 267 Customer preferences ordinal vs cardinal utility, 80 utility functions and, 79–80 Cyclical industries, 41–43 D Dahl, Carol, 44n11 Deadweight loss definition of, 321 from monopoly power, 378 from monopsony power, 387 taxes and, 346 Deaton, Angus, 98n11 Decision making, 163–164 Decision making biases, 194–195 Decreasing-cost industries, 309 Decreasing returns to scale, 223 Dedrick, Jason, 621n8 Deere, Donald, 550n8 Degree of economies of scope, 259–260 De La Torre Ugarte, Daniel G., 39n9 Dell, 8, 235 Delta Air Lines, 234, 243 Demand See also Demand curves; Supply and demand competitive firms and, 285–287 consumer surplus and, 132–134 cyclical industries and, 41–43 durability and, 40–41 elasticity of, 126–127 income elasticities and, 40–43 short-run vs long-run elasticities, 39–48 speculative, 129 Demand curves, 23–25 See also Supply and demand; Individual demand competitive firms and, 285–288 complementary goods and, 24–25 individual demand curves, 112–114 market demand curves, 124–132 monopolies and, 365 shifting of, 24 substitute goods and, 24–25 Demand estimation, 139–143 demand relationship form and, 140–142 interview and experimental approaches to, 143 statistical approach to, 139–140 Demand for loanable funds, 588 Demand shifts, monopolies and, 365–366 Demand theory, 149–157 Cobb-Douglas utility function and, 153 duality in consumer theory and, 154–155 equal margin principle, 151 income and substitution effects and, 155–157 marginal rate of substitution and, 151–152 marginal utility of income and, 152 method of Lagrange multipliers and, 150–151 utility maximization and, 149–150 Department of Justice Antitrust Division, 391, 394 Depletable resources, 584–587 Deposits, refundable, 677 Depreciation, 243–244 Deregulation, 330–331 Derived demands, 530 Dermisi, Sofia, 32n6 Developed countries, labor productivity in, 215 Deviations, risk and, 161–163 Diaper wars, 515–516 Differentiated products, price competition and, 465–467 Diminishing marginal returns, 217–219 Diminishing marginal utility, 95 Direct marketing experiments, 143 Discount bonds, 589