Economics (2nd Edition)
Paul Krugman, Robin Wells
Format: PDF / Kindle (mobi) / ePub
The same unique voice that made Paul Krugman a widely read economist is evident on every page of Economics. The product of the partnership of coauthors Krugman and Robin Wells, the book returns in a new edition.
The new edition is informed and informative, solidly grounded in economic fundamentals yet focused on the realities of today's world and the lives of students. It maintains the signature Krugman/Wells story-driven approach while incorporating organizational changes, new content and features, and new media and supplements.
Watch a video interview of Paul Krugman here.
producer surplus. Just as we derived the demand curve from the willingness to pay of different consumers, we can derive the supply curve from the cost of different producers. The step-shaped curve in Figure 4-6 shows the supply curve implied by the costs shown in the accompanying table. At a price less than $5, none of the students are willing to sell; at a price between $5 and $15, only Andrew is willing to sell, and so on. As in the case of consumer surplus, we can add the individual producer
it was to keep to the right. Why would some places choose the right and others, the left? That’s not completely clear, although it may have depended on the dominant form of traffic. Men riding horses and carrying swords on their left hip preferred to ride on the left (think about getting on or off the horse, and you’ll see why). On the other hand, right-handed people walking but leading horses apparently preferred to walk on the right. In any case, once a rule of the road was established, there
want what they want? Fortunately, we don’t need to answer that question—we just need to acknowledge that people have certain preferences, or tastes, that determine what they choose to consume and that these tastes can change. Economists usually lump together changes in demand due to fads, beliefs, cultural shifts, and so on under the heading of changes in tastes or preferences. For example, once upon a time men wore hats. Up until around World War II, a respectable man wasn’t fully dressed unless
classical model of money and prices 908 The inflation tax 910 The logic of hyperinflation 911 ECONOMICS ➤ IN ACTION Zimbabwe’s Inflation 913 Moderate Inflation and Disinflation 913 The output gap and the unemployment rate 914 FOR INQUIRING MINDS: Okun’s Law 916 The short-run Phillips curve 916 FOR INQUIRING MINDS: The Aggregate Supply Curve and the Short-Run Phillips Curve 918 Inflation expectations and the short-run Phillips curve 919 ECONOMICS ➤ IN ACTION From the Scary Seventies to the
curves for a good. That is, the supply and demand model isn’t just a model of how a competitive market works—it’s also a model of how much consumers and producers gain from participating in that market. So our first step will be to learn how consumer and producer surplus can be derived from the demand and supply curves. We will then see how these concepts can be applied to actual economic issues. 101 KrugWellsEC3e_Econ_CH04.indd 101 3/29/12 9:09 AM 102 PA RT 2 S U P P LY A N D D E M A N D