Principles of Microeconomics

Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources and the interactions among these individuals and firms.

This book is a derivative of OpenStax Principles of Microeconomics. You can download the original free of charge at https://openstax.org/details/books/principles-microeconomics.

Table of Contents

• Preface
• Welcome to Economics!
  • What Economics Is and Why It's Important
  • Microeconomics and Macroeconomics
  • How Economists Use Theories and Models to Understand Economic Issues
  • How Economies Can Be Organized: An Overview of Economic Systems
• Choice in a World of Scarcity
  • How Individuals Make Choices Based on Their Budget Constraint
  • The Production Possibilities Frontier and Social Choices
  • Confronting Objections to the Economic Approach
• Demand and Supply
  • Demand, Supply, and Equilibrium in Markets for Goods and Services
  • Shifts in Demand and Supply for Goods and Services
  • Changes in Equilibrium Price and Quantity: The Four-Step Process
  • Price Ceilings and Price Floors
  • Demand, Supply, and Efficiency
• Labor and Financial Markets
  • Demand and Supply at Work in Labor Markets
  • Demand and Supply in Financial Markets
  • The Market System as an Efficient Mechanism for Information
• Elasticity
  • Price Elasticity of Demand and Price Elasticity of Supply
  • Polar Cases of Elasticity and Constant Elasticity
  • Elasticity and Pricing
  • Elasticity in Areas Other Than Price
• Consumer Choices
  • Consumption Choices
  • How Changes in Income and Prices Affect Consumption Choices
  • Labor-Leisure Choices
  • Intertemporal Choices in Financial Capital Markets
• Cost and Industry Structure
  • Explicit and Implicit Costs, and Accounting and Economic Profit
  • The Structure of Costs in the Short Run
  • The Structure of Costs in the Long Run
• Perfect Competition
  • Perfect Competition and Why It Matters
  • How Perfectly Competitive Firms Make Output Decisions
  • Entry and Exit Decisions in the Long Run
  • Efficiency in Perfectly Competitive Markets
• Monopoly
  • How Monopolies Form: Barriers to Entry
  • How a Profit-Maximizing Monopoly Chooses Output and Price
• Monopolistic Competition and Oligopoly
  • Monopolistic Competition
  • Oligopoly
• Monopoly and Antitrust Policy
  • Corporate Mergers
  • Regulating Anticompetitive Behavior
  • Regulating Natural Monopolies
  • The Great Deregulation Experiment
• Environmental Protection and Negative Externalities
  • The Economics of Pollution
  • Command-and-Control Regulation
  • Market-Oriented Environmental Tools
  • The Benefits and Costs of U.S Environmental Laws
  • International Environmental Issues
  • The Tradeoff between Economic Output and Environmental Protection
• Positive Externalities and Public Goods
  • Why the Private Sector Under Invests in Innovation
  • How Governments Can Encourage Innovation
  • Public Goods
• Poverty and Economic Inequality
  • Drawing the Poverty Line
  • The Poverty Trap
  • The Safety Net
  • Income Inequality: Measurement and Causes
  • Government Policies to Reduce Income Inequality
• Issues in Labor Markets: Unions, Discrimination, Immigration
  • Unions
  • Employment Discrimination
  • Immigration
• Information, Risk, and Insurance
  • The Problem of Imperfect Information and Asymmetric Information
  • Insurance and Imperfect Information
• Financial Markets
  • How Businesses Raise Financial Capital
  • How Households Supply Financial Capital
  • How to Accumulate Personal Wealth
• Public Economy
  • Voter Participation and Costs of Elections
  • Special Interest Politics
  • Flaws in the Democratic System of Government
• International Trade
  • Absolute and Comparative Advantage
  • What Happens When a Country Has an Absolute Advantage in All Goods
  • Intra-industry Trade between Similar Economies
  • The Benefits of Reducing Barriers to International Trade
• Globalization and Protectionism
  • Protectionism: An Indirect Subsidy from Consumers to Producers
  • International Trade and Its Effects on Jobs, Wages, and Working Conditions
  • Arguments in Support of Restricting Imports
  • How Trade Policy Is Enacted: Globally, Regionally, and Nationally
  • The Tradeoffs of Trade Policy
• Appendices
  • The Use of Mathematics in Principles of Economics
  • Indifference Curves
  • Present Discounted Value