Ebook Foundations of microeconomics (7th edition): Part 1

(BQ) Part 1 book Foundations of microeconomics has contents: Getting started, the economic problem, demand and supply, elasticities of demand and supply, efficiency and fairness of markets, government actions in markets, global markets in action,..and other contents.

Find more at http://www.downloadslide.com Find more at http://www.downloadslide.com MyEconLab Provides the Power of Practice ® Optimize your study time with MyEconLab, the online assessment and tutorial ­system When you take a sample test online, MyEconLab gives you targeted ­feedback and a personalized Study Plan to identify the topics you need to review Study Plan The Study Plan shows you the sections you should study next, gives easy access to practice problems, and provides you with an automatically generated quiz to prove mastery of the course material Unlimited Practice As you work each exercise, instant feedback helps you understand and apply the concepts Many Study Plan exercises contain algorithmically generated values to ensure that you get as much practice as you need Learning Resources Study Plan problems link to learning resources that further reinforce concepts you need to master • Help Me Solve This learning aids help you break down a problem much the same way as an instructor would during office hours Help Me Solve This is available for select problems • eText links are specific to the problem at hand so that related concepts are easy to review just when they are needed • A graphing tool enables you to build and manipulate graphs to better understand how concepts, numbers, and graphs connect MyEconLab ® Find out more at www.myeconlab.com Find more at http://www.downloadslide.com Current News Exercises Posted weekly, we find the latest microeconomic and macroeconomic news stories, post them, and write auto-graded multi-part exercises that illustrate the economic way of thinking about the news Interactive Homework Exercises Participate in a fun and engaging activity that helps promote active learning and mastery of important economic concepts Pearson’s experiments program is flexible and easy for instructors and students to use For a complete list of available experiments, visit www.myeconlab.com Find more at http://www.downloadslide.com Foundations of MICROEconomics delivers a complete, hands-on learning system designed around active learning A Learning-by-Doing Approach The Checklist that begins each chapter highlights the key topics covered and the chapter is divided into sections that directly correlate to the Checklist Why does tuition keep rising? The Checkpoint that ends each section provides a full page of practice problems to encourage students to review the material while it is fresh in their minds Each chapter opens with a question about a central issue that sets the stage for the ­material CHECKPOINT 4.1 Distinguish between quantity demanded and demand, and explain what determines demand Demand and Supply CHAPTER CHECKLIST When you have completed your study of this chapter, you will be able to Distinguish between quantity demanded and demand, and explain 88 determines demand Part what • INTRODUCTION Distinguish between quantity supplied and supply, and explain what determines supply Change in Quantity Demanded Versus Change in Demand Explain how demand and determine price and that quantity in just a seen bring a change in demand These Thesupply influences on buyers’ plans you’ve MyEconLab Big picture market, and explain the effects of changes in demand and supply are all the influences on buying plans except for the price of the good To avoid confusion, when the price of the good changes and all other influences on buying plans Chapter • Demand and Supply 89 remain the same, we say there has been a change in the quantity demanded Change in the quantity demanded The distinction between a change in demand and a change in the quantity A change in the quantity of a good demanded is crucial for working out how a market responds to the forces that hit MyEconLab 4.1 that people plan to buyStudy that Plan results 81 it Figure 4.4 illustrates and summarizes the distinction: Key Terms Quiz from a change in the price of the good with all other influences Solutionson buying plans remaining the same Chapter • Demand and Supply • If the price of bottled water rises when other things remain the same, the quantity demanded of bottled water decreases and there is a movement up along the demand curve D0 If the price falls when other things remain the same, the quantity demanded increases and there is a movement down along the demand curve D0 • If some influence on buyers’ plans other than the price of bottled Why Does Tuition Rising? waterKeep changes, there is a change in demand When the demand for bottled water decreases, the demand curve shifts leftward to D1 When Tuition has increased every year since the demand In a given otherwater things remain described In 2001, was D01 foryear, bottled increases, the demand curvedemand shifts right1980 and at the same time, enrollmentward thetosame, and supply was S The market was in D2 but from one year to the Practice Problems 101 EYE on TUITION The following events occur one at a time in the market for cell phones: • The price of a cell phone falls • Producers announce that cell-phone prices will fall next month • The price of a call made from a cell phone falls • The price of a call made from a land-line phone increases • The introduction of camera phones makes cell phones more popular has steadily climbed Figure shows next, some things change The populaequilibrium with 16 million students When you are thinking about the influences on demand, try to get into the these facts The points tell us the levels tion has grown, incomes have increased, enrolled paying an average tuition of habit of asking: Does this influence change the quantity demanded or does it of enrollment (x-axis) and tuition (y-axis, jobs that require more than a high$15,000 By 2010, demand had change The test is: Did the price of the good change or did some other measured in 2010 dollars) in 1981, 1991, demand? school diploma have expanded while increased to D10 At the tuition of influence change? If the price changed, then quantity demanded changed If some and each year from 2001 to 2010 We jobs for high-school graduates have 2001, there would be a severe shortother influence changed and the price remained constant, then demand changed In the News can interpret the data using the demand shrunk, and government subsidized stu- age of college places, so tuition rises and supply model dent loans programs have expanded In 2010, the market was in equilibrium Airlines, now flush, fear a downturn More than 4,500 public and private, 2- These changes increase the demand for at a tuition of $21,000 with 21 million So far this year, airlines have been able to raise fares but still fill their planes FIGURE 4.4 4-year schools supply college year and ■ college education students enrolled Source: The New York Times, June 10, 2011 education services andDemanded more than 20 VersusFigure MyEconLab Animation Change in Quantity Change in Demand illustrates the market for Demand for college places will keep Does this news clip imply that the law of demand doesn’t work in the real million people demand these services college education that we’ve just increasing and tuition will keep rising world? Explain why or why not Theinlaw of demand says: Other things A decrease the An increase in the Pricethe (dollars per bottle) remaining the same, if tuition rises, quantity demanded quantity demanded Solutions to Practice Problems FIGURE 2.50 The quantity demanded decreases The quantity demanded increases Tuition (thousands of 2010 dollars per year) quantity of college places demanded Price A fall in the price of a cell phone increases the quantity of cell phones and there is a movement and there is a movement down decreases The lawup of along supply says: Other demanded but has no effect on the demand for cell phones 40 An increase in population, a rise curve D if the demand D if the price if tuition rises, along the demand thingscurve remaining same, Quantity in incomes, changes in jobs, and With the producers’ announcement, the expected future price of a cell phone of the good rises and0 other demanded 2.00 things theofprice ofloans the good falls and the quantity of college places supplied an expansion student falls, which decreases the demand for cell phones today increases increased the demand for remain the same remainincreases the same.Tuition is determined at the other things A fall in the price of a call from a cell phone increases the demand for cell college education level that the quantity of college A decrease in makes demand An increase in demand phones because a cell-phone call and a cell phone are complements S places demanded equal the quantity 1.50 decreases and the Demand increases and the A rise in the price of a call from a land-line phone increases the demand for Demand 30 supplied demand curve shifts leftward demand curve shifts rightward cell phones because a land-line phone and a cell phone are substitutes Explain the effect of each event on the demand for cell phones Use a graph to illustrate the effect of each event Does any event (or events) illustrate the law of demand? Eye On boxes apply theory to important issues and problems that shape our global society and ­individual decisions Confidence-Building Graphs use color to show the direction of shifts and detailed, numbered captions guide students With cell phones more popular, the demand for cell phones increases step-by-step through the action Figure illustrates the effect of a fall in the price of a cell phone as a move- ment along the demand curve D Figure illustrates the effect of an increase in the demand for cell phones as the shift of the demand curve from D0 to D1 and a decrease in the demand for cell phones as the shift of the demand curve from D0 to D2 A fall in the price of a cell phone (other things remaining the same) illustrates the law of demand Figure illustrates the law of demand The other events change demand and not illustrate the law of demand 100% of the figures are animated in ­MyEconLab, with step-by-step audio narration Solution to In the News The law of demand states: If the price of an airline ticket rises, other things remaining the same, the quantity demanded of airline tickets will decrease The demand curve for airline tickets slopes downward The law of demand does work in the real world Airlines can still fill their planes because “other things” did not remain the same Some event increased the demand for airline tickets D (from D0 to D1) if (from D0 to D2) if 1.00 The price of a substitute Quantity falls0 or the price of a complement Tuition rises (thousands 2010is dollars per year) The price of theofgood 0.50 expected FIGURE 25 2to fall Price decreases.* Income 20 future income Demand 10 Expected or credit decreases increases 05 15 The number of buyers 01 decreases * Bottled 10 water is a normal91good Demand decreases 21 D1 15 10 10 expected to rise D0 tuition increased 11 12 The price of a substitute rises or the price of a complement and the quantity falls supplied increased The price of the good is 13 Quantity (millions of bottles per day) Income increases Expected future income or credit increases The number of buyers D10 increases D1 D01 81 D2 D0 D2 10 15 20 Quantity 25 Enrollment (millions) Figure The Data: A Scatter Diagram 10 16 21 30 40 Enrollment (millions) Figure The Market for College Education Find more at http://www.downloadslide.com This page intentionally left blank Find more at http://www.downloadslide.com Foundations of MICROEconomics Robin Bade Michael Parkin University of Western Ontario Seventh Edition Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montréal Toronto Delhi Mexico City São Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo Find more at http://www.downloadslide.com Editor in Chief: Donna Battista Executive Acquisitions Editor: Adrienne D’Ambrosio Editorial Project Manager: Sarah Dumouchelle Editorial Assistant: Elissa Senra-Sargent Executive Marketing Manager: Lori DeShazo Managing Editor: Jeff Holcomb Production Project Manager: Nancy Freihofer Media Publisher: Denise Clinton Content Product Manager: Noel Lotz Senior Media Producer: Melissa Honig Image Permission Manager: Rachel Youdelman Photo Researcher: Joseph Songco Art Director, Cover: Jonathan Boylan Cover Image: Rich Bunpot/Shutterstock Copyeditor: Catherine Baum Technical Illustrator: Richard Parkin Project Management, Page Makeup, Design: Integra Printer/Binder: Courier/Kendallville Cover Printer: Courier/Kendallville Text Font: 10/12, Palatino-Roman Credits and acknowledgments borrowed from other sources and reproduced, with permission, in this textbook appear on the appropriate page within text and on pages C-1–C-2 FRED® is a registered trademark and the FRED® logo and ST.LOUIS FED are trademarks of the Federal Reserve Bank of St Louis, http://researchstlouisfed.org/fred2/ Copyright © 2015, 2013, 2011 by Pearson Education, Inc All rights reserved Manufactured in the United States of America This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or l­ikewise To obtain permission(s) to use material from this work, please submit a written request to Pearson Education, Inc., Permissions Department, One Lake Street, Upper Saddle River, New Jersey 07458, or you may fax your request to 201-236-3290 Many of the designations by manufacturers and sellers to distinguish their products are claimed as trademarks Where those designations appear in this book, and the publisher was aware of a trademark claim, the designations have been printed in initial caps or all caps Library of Congress Cataloging-in-Publication Data Bade, Robin   Foundations of microeconomics/Robin Bade, Michael Parkin.—7th ed   pages cm   Includes index   ISBN 978-0-13-346240-1   ISBN 978-0-13-347710-8 (microeconomics split version)   ISBN 978-0-13-346062-9 (macroeconomics split version)   ISBN 978-0-13-346254-8 (essentials split version)   1. Economics.  I. Parkin, Michael, 1939–  II. Title   HB171.5.B155 2015  330—dc23 2013045475 10 9 8 7 6 5 4 3 2 1 ISBN 10:      0-13-347710-X ISBN 13: 978-0-13-347710-8 Find more at http://www.downloadslide.com To Erin, Tessa, Jack, Abby, and Sophie Find more at http://www.downloadslide.com This page intentionally left blank Find more at http://www.downloadslide.com About the Authors Robin Bade was an undergraduate at the University of Queensland, Australia, where she earned degrees in mathematics and economics After a spell teaching high school math and physics, she enrolled in the Ph.D program at the Australian National University, from which she graduated in 1970 She has held faculty appointments at the University of Edinburgh in Scotland, at Bond University in Australia, and at the Universities of Manitoba, Toronto, and Western Ontario in Canada Her research on international capital flows appears in the International Economic Review and the Economic Record Robin first taught the principles of economics course in 1970 and has taught it (alongside intermediate macroeconomics and international trade and finance) most years since then She developed many of the ideas found in this text while conducting tutorials with her students at the University of Western Ontario Michael Parkin studied economics in England and began his university teaching career immediately after graduating with a B.A from the University of Leicester He learned the subject on the job at the University of Essex, England’s most exciting new university of the 1960s, and at the age of 30 became one of the youngest full professors He is a past president of the Canadian Economics Association and has served on the editorial boards of the American Economic Review and the Journal of Monetary Economics His research on macroeconomics, monetary economics, and international economics has resulted in more than 160 publications in journals and edited volumes, including the American Economic Review, the Journal of Political Economy, the Review of Economic Studies, the Journal of Monetary Economics, and the Journal of Money, Credit, and Banking He is author of the bestselling textbook, Economics (Addison-Wesley), now in its Eleventh Edition Robin and Michael are a wife-and-husband team Their most notable joint r­ esearch created the Bade-Parkin Index of central bank independence and spawned a vast amount of research on that topic They don’t claim credit for the independence of the new European Central Bank, but its constitution and the movement toward greater independence of central banks around the world were aided by their pioneering work Their joint textbooks include Macroeconomics (Prentice-Hall), Modern Macroeconomics (Pearson Education Canada), and Economics: Canada in the Global Environment, the Canadian adaptation of Parkin, Economics (Addison-Wesley) They are dedicated to the challenge of explaining economics ever more clearly to a growing body of students Music, the theater, art, walking on the beach, and five grandchildren provides their relaxation and fun ix ... Elasticities of Demand and Supply  11 1 Chapter Checklist  11 1 5 .1 The Price Elasticity of Demand  11 2 Percentage Change in Price,  11 2 Percentage Change in Quantity Demanded,  11 3 Comparing the... 1.  Economics.  I. Parkin, Michael, 19 39–  II. Title   HB1 71. 5.B155 2 015  330—dc23 2 013 045475 10  9 8 7 6 5 4 3 2 1 ISBN 10 :      0 -13 -347 710 -X ISBN 13 : 978-0 -13 -347 710 -8 Find more at http://www.downloadslide.com... and Quantity,  11 3 Elastic and Inelastic Demand,  11 4 Influences on the Price Elasticity of Demand,  11 4 Computing the Price Elasticity of Demand,  11 6 Interpreting the Price Elasticity of Demand Number,  11 7