Economic Theory  book cover
2nd Edition

Economic Theory

ISBN 9780202309804
Published January 15, 2007 by Routledge
242 Pages

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Book Description

Others might have called this book Micro Theory or Price Theory. Becker's choice of Economic Theory as the title for his book reflects his deep belief that there is only one kind of economic theory, not separate theories for micro problems, macro problems, non-market decisions, and so on. Indeed, as he notes, the most promising development in recent years in the literature on large scale economic problems such as unemployment has been the increasing reliance on utility maximization, a concept generally identified with microeconomics.

Microeconomics is the subject matter of this volume, but it is emphatically not confined to microeconomics in the literal sense of micro units like firms or households. Becker's main interest is in market behavior of aggregations of firms and households. Although important inferences are drawn about individual firms and households, the author tries to understand aggregate responses to changes in basic economic parameters like tax rates, tariff schedules, technology, or antitrust provisions. His discussion is related to the market sector in industrialized economies, but the principles developed are applied to other sectors and different kinds of choices.

Becker argues that economic analysis is essential to understand much of the behavior traditionally studied by sociologists, anthropologists, and other social scientists. The broad definition of economics in terms of scarce means and competing ends is taken seriously and should be a source of pride to economists since it provides insights into a wide variety of problems. Practically all statements proved mathematically are also provided geometrically or verbally in the body of the text.

Table of Contents

chapter 1 Introduction 1 What Is Economics? The Role of Prices 2 Supply and Demand Analysis PART ONE Demand Analysis chapter 2 The Scarcity Principle 3 Definition of Demand Elasticity of Demand 4 The Opportunity Set, Income Effects, 5 Substitution Effects chapter 3 Indifference Curves 6 Rational Behavior, The Indifference System 7 Demand Curves, Engel Curves 8 Combined Demand Curves Market Demand and Engel Curve Differences in Tastes PART TWO Supply of Products chapter 5 Fundamentals of Supply, Firm and Market Supply Curves, Economic Rent, chapter 6 Competition and Monopoly, The Comparative Statics of Competitive Equilibrium, The Stability of Equilibrium 20 Monopoly Natural Monopoly 21 Collusion 22 Price Discrimination 23 Non-price Rationing PART THREE Production and the Demand for Factors chapter 7 Production by the Firm and Industry 24 Production Functions The Cost-Minimizing Conditions 25 Cost Curves Increasing and Decreasing Costs 26 Technological Change 27 Induced Technological Change chapter 8 Demand for Factors 28 Derived Demand for Factors of Production Fixed Quantities of Other Factors Fixed Prices of Other Factors 29 Substitution Between Factors 30 Substitution Between Industries: A Numerical Example, A Single Industry, Two Industries 31 Substitution Between Industries: A General Model PART FOUR Supply of Factors of Production chapters Human Capital 32 Land, Labor, and Capital Population 33 Labor Force Participation 34 Nonmarket Activities Occupational Choice Appendix 35 Investment in Training 36 Differences in Abilities and Opportunities The Distribution of Earnings Appendix chapter 10 Accumulation of Capital over Time 37 Consumption and Savings 38 The Rate of Growth in Consumption Appendix *39 The Determination of Interest Rates The Rate of Investment = Savings 40 Growth Paths

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Becker, Gary