Microeconomics Robert S. Pindyck, Daniel L. Rubinfeld.

Multi-media teaching aids available to supplement the text.

Includes bibliographical references and index.

Part 1 Introduction: Markets and Prices 1 -- 1.1 The Themes of Microeconomics 4 -- 1.2 What Is a Market? 7 -- 1.3 Real versus Nominal Prices 11 -- 2 The Basics of Supply and Demand 19 -- 2.2 The Market Mechanism 23 -- 2.3 Changes in Market Equilibrium 24 -- 2.4 Elasticities of Supply and Demand 30 -- 2.5 Short-Run versus Long-Run Elasticities 35 -- 2.6 Understanding and Predicting the Effects of Changing Market Conditions 44 -- 2.7 Effects of Government Intervention -- Price Controls 53 -- Part 2 Producers, Consumers, and Competitive Markets 59 -- 3 Consumer Behavior 61 -- 3.1 Consumer Preferences 62 -- 3.2 Budget Constraints 75 -- 3.3 Consumer Choice 79 -- 3.4 Revealed Preference 86 -- 3.5 Marginal Utility and Consumer Choice 89 -- 3.6 Cost-of-Living Indexes 92 -- 4 Individual and Market Demand 101 -- 4.1 Individual Demand 102 -- 4.2 Income and Substitution Effects 110 -- 4.3 Market Demand 116 -- 4.4 Consumer Surplus 123 -- 4.5 Network Externalities 127 -- 4.6 Empirical Estimation of Demand 131 -- Appendix to Chapter 4: Demand Theory -- A Mathematical Treatment 139 -- 5 Choice Under Uncertainty 149 -- 5.1 Describing Risk 150 -- 5.2 Preferences Toward Risk 155 -- 5.3 Reducing Risk 161 -- 5.4 The Demand for Risky Assets 166 -- 6 Production 177 -- 6.1 The Technology of Production 178 -- 6.2 Isoquants 179 -- 6.3 Production with One Variable Input (Labor) 181 -- 6.4 Production with Two Variable Inputs 191 -- 6.5 Returns to Scale 197 -- 7 The Cost of Production 203 -- 7.1 Measuring Cost: Which Costs Matter? 203 -- 7.2 Cost in the Short Run 208 -- 7.3 Cost in the Long Run 215 -- 7.4 Long-Run versus Short-Run Cost Curves 224 -- 7.5 Production with Two Outputs -- Economies of Scope 229 -- 7.6 Dynamic Changes in Costs -- The Learning Curve 232 -- 7.7 Estimating and Predicting Cost 237 -- Appendix to Chapter 7: Production and Cost Theory -- A Mathematical Treatment 246 -- 8 Profit Maximization and Competitive Supply 251 -- 8.1 Perfectly Competitive Markets 252 -- 8.2 Profit Maximization 254 -- 8.3 Marginal Revenue, Marginal Cost, and Profit Maximization 255 -- 8.4 Choosing Output in the Short Run 258 -- 8.5 The Competitive Firm's Short-Run Supply Curve 263 -- 8.6 The Short-Run Market Supply Curve 266 -- 8.7 Choosing Output in the Long Run 271 -- 8.8 The Industry's Long-Run Supply Curve 277 -- 9 The Analysis of Competitive Markets 287 -- 9.1 Evaluating the Gains and Losses from Government Policies -- Consumer and Producer Surplus 288 -- 9.2 The Efficiency of a Competitive Market 294 -- 9.3 Minimum Prices 298 -- 9.4 Price Supports and Production Quotas 302 -- 9.5 Import Quotas and Tariffs 309 -- 9.6 The Impact of a Tax or Subsidy 313 -- Part 3 Market Structure and Competitive Strategy 325 -- 10 Market Power: Monopoly and Monopsony 327 -- 10.1 Monopoly 328 -- 10.2 Monopoly Power 339 -- 10.3 Sources of Monopoly Power 345 -- 10.4 The Social Costs of Monopoly Power 347 -- 10.5 Monopsony 352 -- 10.6 Monopsony Power 355 -- 10.7 Limiting Market Power: The Antitrust Laws 359 -- 11 Pricing with Market Power 369 -- 11.1 Capturing Consumer Surplus 370 -- 11.2 Price Discrimination 371 -- 11.3 Intertemporal Price Discrimination and Peak-Load Pricing 382 -- 11.4 The Two-Part Tariff 385 -- 11.5 Bundling 392 -- 11.6 Advertising 403 -- Appendix to Chapter 11: Transfer Pricing in the Integrated Firm 413 -- 12 Monopolistic Competition and Oligopoly 423 -- 12.1 Monopolistic Competition 424 -- 12.2 Oligopoly 429 -- 12.3 Price Competition 437 -- 12.4 Competition versus Collusion: The Prisoners' Dilemma 442 -- 12.5 Implications of the Prisoners' Dilemma for Oligopolistic Pricing 445 -- 12.6 Cartels 451 -- 13 Game Theory and Competitive Strategy 461 -- 13.1 Gaming and Strategic Decisions 461 -- 13.2 Dominant Strategies 464 -- 13.3 The Nash Equilibrium Revisited 466 -- 13.4 Repeated Games 472 -- 13.5 Sequential Games 476 -- 13.6 Threats, Commitments, and Credibility 479 -- 13.7 Entry Deterrence 483 -- 13.8 Bargaining Strategy 489 -- 13.9 Auctions 491 -- 14 Markets for Factor Inputs 501 -- 14.1 Competitive Factor Markets 501 -- 14.2 Equilibrium in a Competitive Factor Market 514 -- 14.3 Factor Markets with Monopsony Power 518 -- 14.4 Factor Markets with Monopoly Power 523 -- 15 Investment, Time, and Capital Markets 533 -- 15.1 Stocks versus Flows 534 -- 15.2 Present Discounted Value 534 -- 15.3 The Value of a Bond 538 -- 15.4 The Net Present Value Criterion for Capital Investment Decisions 542 -- 15.5 Adjustments for Risk 545 -- 15.6 Investment Decisions by Consumers 549 -- 15.7 Intertemporal Production Decisions -- Depletable Resources 551 -- 15.8 How Are Interest Rates Determined? 555 -- Part 4 Information, Market Failure, and the Role of Government 561 -- 16 General Equilibrium and Economic Efficiency 563 -- 16.1 General Equilibrium Analysis 563 -- 16.2 Efficiency in Exchange 567 -- 16.3 Equity and Efficiency 575 -- 16.4 Efficiency in Production 578 -- 16.5 The Gains from Free Trade 585 -- 16.6 An Overview -- The Efficiency of Competitive Markets 590 -- 16.7 Why Markets Fail 591 -- 17 Markets with Asymmetric Information 595 -- 17.1 Quality Uncertainty and the Market for Lemons 596 -- 17.2 Market Signaling 601 -- 17.3 Moral Hazard 606 -- 17.4 The Principal-Agent Problem 609 -- 17.5 Managerial Incentives in an Integrated Firm 613 -- 17.6 Asymmetric Information in Labor Markets: Efficiency Wage Theory 616 -- 18 Externalities and Public Goods 621 -- 18.1 Externalities 621 -- 18.2 Ways of Correcting Market Failure 625 -- 18.3 Externalities and Property Rights 638 -- 18.4 Common Property Resources 642 -- 18.5 Public Goods 644 -- 18.6 Private Preferences for Public Goods 649 -- Appendix The Basics of Regression 655 -- Example 1.1 Markets for Prescription Drugs 10 -- Example 1.2 The Price of Eggs and the Price of a College Education 12 -- Example 1.3 The Minimum Wage 13 -- Example 2.1 The Price of Eggs and the Price of a College Education Revisited 26 -- Example 2.2 Wage Inequality in the United States 27 -- Example 2.3 The Long-Run Behavior of Natural Resource Prices 28 -- Example 2.4 The Market for Wheat 33 -- Example 2.5 The Demand for Gasoline and Automobiles 39 -- Example 2.6 The Weather in Brazil and the Price of Coffee in New York 41 -- Example 2.7 Declining Demand and the Behavior of Copper Prices 47 -- Example 2.8 Upheaval in the World Oil Market 49 -- Example 2.9 Price Controls and Natural Gas Shortages 54 -- Example 3.1 Designing New Automobiles 71 -- Example 3.3 Decision Making and Public Policy 82 -- Example 3.4 A College Trust Fund 85 -- Example 3.5 Revealed Preference for Recreation 88 -- Example 3.6 Gasoline Rationing 91 -- Example 3.7 The Bias in the CPI 97 -- Example 4.1 Consumer Expenditures in the United States 108 -- Example 4.2 The Effects of a Gasoline Tax 114 -- Example 4.3 The Aggregate Demand for Wheat 120 -- Example 4.4 The Demand for Housing 122 -- Example 4.5 The Value of Clean Air 125 -- Example 4.6 Network Externalities and the Demands for Computers and E-Mail 130 -- Example 4.7 The Demand for Ready-to-Eat Cereal 134 -- Example 5.1 Deterring Crime 154 -- Example 5.2 Business Executives and the Choice of Risk 160 -- Example 5.3 The Value of Title Insurance When Buying a House 163 -- Example 5.4 The Value of Information in the Dairy Industry 165 -- Example 5.5 Investing in the Stock Market 173 -- Example 6.1 Malthus and the Food Crisis 187 -- Example 6.2 Labor Productivity and the Standard of Living 189 -- Example 6.3 A Production Function for Wheat 196

-- Example 6.4 Returns to Scale in the Carpet Industry 199 -- Example 7.1 Choosing the Location for a New Law School Building 205 -- Example 7.2 Sunk, Fixed, and Variable Costs: Computers, Software, and Pizzas 207 -- Example 7.3 The Short-Run Cost of Aluminum Smelting 213 -- Example 7.4 The Effect of Effluent Fees on Input Choices 220 -- Example 7.5 Economies of Scope in the Trucking Industry 232 -- Example 7.6 The Learning Curve in Practice 236 -- Example 7.7 Cost Functions for Electric Power 240 -- Example 7.8 A Cost Function for the Savings and Loan Industry 241 -- Example 8.1 The Short-Run Output Decision of an Aluminum Smelting Plant 260 -- Example 8.2 Some Cost Considerations for Managers 261 -- Example 8.3 The Short-Run Production of Petroleum Products 265 -- Example 8.4 The Short-Run World Supply of Copper 268 -- Example 8.5 The Long-Run Supply of Housing 282 -- Example 9.1 Price Controls and Natural Gas Shortages 292 -- Example 9.2 The Market for Human Kidneys 295 -- Example 9.3 Airline Regulation 300 -- Example 9.4 Supporting the Price of Wheat 306 -- Example 9.5 The Sugar Quota 312 -- Example 9.6 A Tax on Gasoline 318 -- Example 10.1 Astra-Merck Prices Prilosec 334 -- Example 10.2 Markup Pricing: Supermarkets to Designer Jeans 342 -- Example 10.3 The Pricing of Prerecorded Videocassettes 343 -- Example 10.4 Monopsony Power in U.S. Manufacturing 358 -- Example 10.5 A Phone Call About Prices 362 -- Example 10.6 The United States versus Microsoft 363 -- Example 11.1 The Economics of Coupons and Rebates 379 -- Example 11.2 Airline Fares 380 -- Example 11.3 How to Price a Best-Selling Novel 384 -- Example 11.4 Polaroid Cameras 389 -- Example 11.5 Pricing Cellular Phone Service 390 -- Example 11.6 The Complete Dinner versus a la Carte: A Restaurant's Pricing Problem 401 -- Example 11.7 Advertising in Practice 406.