Textbook Guide

Principles of Economics, 6th Edition

Wed, 2012-02-01 19:53 | by ddoctor
Book cover

By N. Gregory Mankiw

This guide helps you find LearnLiberty videos to supplement N. Gregory Mankiw’s Principles of Economics textbook. The table of contents for the textbook is shown below with links to videos that explain the concepts. These videos provide new ways for professors and students to explain and understand economic concepts.

Principles of Economics continues to be one of the most popular economics textbooks. Professor Mankiw emphasizes material you will likely find interesting about the economy (particularly if you are studying economics for the first time), including real-life scenarios, facts, and how economic concepts influence everyday decisions.

Part One: Introduction

  • Chapter 1. Ten Principles of Economics (p. 3-17)

  • Chapter 2. Thinking Like an Economist (p. 21-46)

    • The economist as scientist
      • The scientific method: Observation, theory, and more observation
      • The role of assumptions
      • Economic models
      • Our first model: The circular-flow diagram
      • Our second model: the production possibilities frontier
      • Microeconomics and macroeconomics
    • The economist as policy adviser
    • Why economists disagree
      • Differences in scientific judgments
      • Differences in values
      • Perception vs. reality
    • Let's get going
      • In the news: Environmental economics
    • Appendix: Graphing a brief review

  • Chapter 3. Interdependence and the Gains from Trade (p. 49-59)

    • A parable for the modern economy
      • Production possibilities
      • Specialization and trade
    • Comparative advantage: The driving force of specialization
    • Applications of comparative advantage
      • Should Tom Brady mow his own lawn?
      • Should the United States trade with other countries?
      • In the news: The changing face of international trade

  • Chapter 5. Elasticity and Its Application (p. 89-106)

    • The elasticity of demand
      • The price elasticity of demand and its determinants
      • Computing the price elasticity of demand
      • The midpoint method: A better way to calculate
        • Percentage changes and elasticities
      • The variety of demand curves
      • FYI: A few elasticities from the real world
      • Total revenue and the price elasticity of demand
      • Elasticity and total revenue along a linear demand curve
      • Other demand elasticities
    • The elasticity of supply
      • The price elasticity of supply and its determinants
      • Computing the price elasticity of supply
      • The variety of supply curves
    • Three applications of supply, demand, and elasticity
      • Can good news from farming be bad news for farmers?
      • Why did OPEC fail to keep the price of oil high?
      • Does drug interdiction increase or decrease drug-related crime?

  • Chapter 6. Supply, Demand, and Government Policies (p. 111-128)

    • Controls on prices
      • How price ceilings affect market outcomes
      • Case study: Lines at the gas pump
      • Case study: Rent control in the short run and the long run
      • How price floors affect market outcomes
      • Case study: The minimum wage
      • Evaluating price controls
      • In the news: Should unpaid internships be allowed?
    • Taxes
      • How taxes on sellers affect market outcomes
      • How taxes on buyers affect market outcomes
      • Case study: Can Congress distribute the burden of a payroll tax?
      • Elasticity and tax incidence
      • Case study: Who pays the luxury tax?

  • Part Three: Markets and Welfare

  • Chapter 7. Consumers, Producers and the Efficiency of Markets (p. 135-150)

    • Consumer surplus
      • Willingness to pay
      • Using the demand curve to measure consumer surplus
      • How a lower price raises consumer surplus
      • What does consumer surplus measure?
    • Producer surplus
      • Cost and the willingness to sell
      • Using the supply curve to measure producer surplus
      • How a higher price raises producer surplus
    • Market efficiency
      • The benevolent social planner
      • Evaluating the market equilibrium
      • In the news: Ticket scalping
      • Case study: Should there be a market in organs?
    • Conclusion: Market Efficiency and Market Failure

  • Chapter 8. Application: The Costs of Taxation (p. 155-166)

    • The deadweight loss of taxation
      • How a tax affects market participants
      • Deadweight losses and the gains from trade
    • The determinants of the deadweight loss
      • Case study: The deadweight loss debate
    • Deadweight loss and tax revenue as taxes vary

  • Chapter 9. Application: International Trade (p. 171-187)

    • The determinants of trade
      • The equilibrium without trade
      • The world price and comparative advantage
    • The winners and losers from trade
      • The gains and losses of an exporting country
      • The gains and losses of an importing county
      • The effects of a tariff
      • The lessons for trade policy
      • Other benefits of international trade
      • In the news: Trade skirmishes
    • The arguments for restricting trade
      • The jobs argument
      • In the news: Should the winners from free trade compensate the losers?
      • The national-security argument
      • In the news: Second thoughts about free trade
      • The infant-industry argument
      • The unfair-competition argument
      • The protection-as-a-bargaining-chip argument
      • Case study: Trade agreements and the World Trade Organization

  • Part Four: The Economics of Public Sector

  • Chapter 10. Externalities (p. 195-212)

    • Externalities and market inefficiency
      • Welfare economics: A recap
      • Negative externalities
      • Positive externalities
      • In the news: The externalities of country living
      • Case study: Technology spillovers, industrial policy, and patent protection
    • Public policies toward externalities
      • Command-and-control policies: Regulation
      • Market-based policy 1:corrective taxes and subsidies
      • Case study: Why is gasoline taxed so heavily?
      • Market-based policy 2: Tradable pollution permits
      • Objections to the economic analysis of pollution
      • In the news: Cap and trade
    • Private solutions to externalities
      • The types of private solutions
      • The Coase Theorem
      • Why private solutions do not always work

  • Chapter 11. Public Goods and Common Resources (p. 217-229)

    • The different kinds of goods
    • Public goods
      • The free-rider problem
      • Some important public goods
      • Case study: Are lighthouses public goods?
      • The difficult job of cost-benefit analysis
      • Case study: How much is a life worth?
    • Common resources
    • Conclusion: The importance of property rights

  • Chapter 12. The Design of the Tax System (p. 233-252)

    • A financial overview of the U.S. Government
    • Taxes and efficiency
      • Deadweight losses
      • In the news: The temporarily disappearing estate tax
      • Case study: Should income or consumption be taxed?
      • Administrative burden
      • Marginal tax rates vs. average tax rates
      • Lump-sum taxes
    • Taxes and equity
      • The benefits principle
      • The ability-to-pay principle
      • Case study: How the tax burden is distributed
      • Tax incidence and tax equity
      • Case study: Who pays the corporate income tax?
      • In the news: The Value-Added Tax
    • Conclusion: The tradeoff between equity and efficiency

  • Part Five: Firm Behavior and the Organization of Industry

  • Chapter 13. The Costs of Production (p. 259- 274)

    • What are costs?
      • Total revenue, total cost, and profit
      • Costs as opportunity costs
      • The cost of capital as an opportunity cost
      • Economic profit vs. accounting profit
    • Production and costs
      • The production function
      • From the production function to the total-cost curve
    • The various measures of cost
      • Fixed and variable costs
      • Average and marginal cost
      • Cost curves and their shapes
      • Typical cost curves
    • Costs in the short run and in the long run
      • The relationship between short-run and long-run average
        • Total cost
      • Economies and diseconomies of scale
      • FYI: Lessons from a pin factory

  • Chapter 14. Firms in Competitive Markets (p. 279- 295)

    • What is a competitive market?
      • The meaning of competition
      • The revenue of a competitive firm
    • Profit maximization and the competitive firm's supply curve
      • A simple example of profit maximization
      • The marginal-cost curve and the firm's supply decision
      • The firm's short-run decision to shut down
      • Spilt milk and other sunk costs
      • Case study: Near-empty restaurants and off-season miniature golf
      • The firm's long-run decision to exit or enter a market
      • Measuring profit in our graph for the competitive firm
    • The supply curve in a competitive market
      • The short run: Market supply with a fixed number of firms
      • The long run: Market supply with entry and exit
      • Why do competitive firms stay in business if they make zero profit?
      • A shift in demand in the short run and long run
      • Why the long-run supply curve might slope upward
    • Conclusion: Behind the supply curve

  • Chapter 15. Monopoly (p. 299- 323)

    • Why monopolies arise
      • Monopoly resources
      • Government-created monopolies
      • Natural monopolies
    • How monopolies make production and pricing decisions
      • Monopoly versus competition
      • A monopoly's revenue
      • Profit maximization
      • A monopoly's profit
      • Why a monopoly does not have a supply curve
      • Case Study: Monopoly drugs vs. generic drugs
    • The welfare cost of monopolies
    • The deadweight loss
    • The monopoly's profit: A social cost?
    • Price discrimination
      • A parable about pricing
      • The moral of the story
      • The analytics of price discrimination
      • Examples of price discrimination
    • Public policy toward monopolies
      • TKTS and other schemes
      • Increasing competition with antitrust laws
      • President Obama's antitrust policy
      • Regulation
      • Public ownership
      • Doing nothing
    • Conclusion: The prevalence of monopolies

  • Chapter 16. Monopolistic Competition (p. 329- 344)

    • Between monopoly and perfect competition
    • Competition with differentiated products
      • The monopolistically competitive firm in the short run
      • The long-run equilibrium
      • Monopolistic vs. perfect competition
      • Monopolistic competition and the welfare of society
      • Insufficient variety as a market failure
    • Advertising
      • The debate over advertising
      • Case study: Advertising and the price of eyeglasses
      • Advertising as a signal of quality
      • FYI: Galbraith vs. Hayek
      • Brand names

  • Chapter 17. Oligopoly (p. 375-393)

    • Markets with only a few sellers
      • A duopoly example
      • Competition, monopolies, and cartels
      • In the news: Public price fixing
      • The equilibrium for an oligopoly
      • How the size of an oligopoly affects the market outcome
        • Market outcome
    • The economics of cooperation
      • The prisoner's dilemma
      • Oligopolies as a prisoner's dilemma
      • Case study: OPEC and the world oil market
      • Other examples of the prisoner's dilemma
      • The prisoner's dilemma and the welfare of society
      • Why people sometimes cooperate
      • Case study: The prisoner's dilemma tournament
    • Public policy toward oligopolies
      • Restraint of trade and the antitrust laws
      • Case study: An illegal phone call
      • Controversies over antitrust policy
      • Case study: The Microsoft case
    • Conclusion
      • In the news: The next big antitrust target?

  • Chapter 19. Earnings and Discrimination (p. 397-411)

    • Some determinants of equilibrium wages
    • The economics of discrimination
      • Measuring labor-market discrimination
      • Case study: Is Emily more employable than Lakisha?
      • Discrimination by employers
      • Case study: Segregated streetcars and the profit motive
      • Discrimination by customers and governments
      • Case study: Discrimination in sports
      • In the news: Gender differences

  • Part Seven: Topics for Further Study

  • Chapter 21. The Theory of Consumer Choice (p. 439-461)

    • The budget constraint: What the consumer can afford
    • Preferences: What the consumer wants
      • Representing preferences with indifference curves
      • Four properties of indifference curves
      • Two extreme examples of indifference curves
    • Optimization: What the consumer chooses
      • The consumer's optimal choices
      • FYI: Utility; An alternative way to describe preferences and optimization
      • How changes in income affect the consumer’s choices
      • Income and substitution effects
      • Deriving the demand curve
    • Three applications
      • Do all demand curves slope downward?
      • Case study: The search for Giffen goods
      • How do wages affect labor supply?
      • Case study: Income effects on labor supply; Historical trends, lottery winners, and the Carnegie Conjecture
      • In the news: Backward-sloping labor supply in Kiribati
      • How do interest rates affect household saving?
    • Conclusion: Do people really think this way?

  • Chapter 22. Frontiers of Microeconomics (p. 467- 480)

    • Asymmetric information
      • Hidden actions: Principals, agents, and moral hazard
      • FYI: Corporate management
      • Hidden characteristics: Adverse selection and the lemons problem
      • Signaling to convey private information
      • Case study: Gifts as signals
      • Screening to uncover private information
    • Political economy
    • Behavioral economics
      • People aren’t always rational    
      • People care about fairness
      • In the news: Sin taxes
      • People are inconsistent over time

  • Part Eight: The Data of Macroeconomics

  • Chapter 23. Measuring a Nation's Income (p. 491-508)

    • The economy's income and expenditure
    • The measurement of gross domestic product
      • "GDP Is the market value..."
      • "... of all..."
      • "... final..."
      • "... goods and services..."
      • "... produced..."
      • "... within a country..."
      • "... in a given period of time."
    • The components of GDP
      • FYI: Other measurements of income
      • Consumption
      • Investment
      • Government purchases
      • Net exports
      • Case study: The components of the U.S. GDP
    • Real vs. nominal GDP
      • A numerical example
      • The GDP deflator
      • Case study: Real GDP over recent history
    • Is GDP a good measurement of economic well being?
      • In the news: The underground economy
      • In the news: Beyond gross domestic product
      • Case study: International difference in GDP and the quality of life

  • Chapter 24. Measuring the Cost of Living (p. 513-526)

    • The consumer price index (CPI)
      • How the consumer price index is calculated
      • FYI: What is in the CPI’s basket?
      • Problems in measuring the cost of living
      • In the news: Shopping for the CPI
      • GDP deflator vs. consumer price index
    • Correcting economic variables for the effects of inflation
      • Dollar figures from different times
      • Indexation
      • FYI: Mr. Index goes to Hollywood
      • Real and nominal interest rates
      • Case study: Interest rates in the U.S. Economy

  • Chapter 26. Saving, Investment, and the Financial System (p. 555-572)

    • Financial institutions in the U.S. economy
      • Financial markets
      • Financial intermediaries
      • FYI: Key numbers for stock watchers
      • Summing up
      • FYI: Financial crises
    • Saving and investment in the national income accounts
      • Some important identities
      • The meaning of saving and investment
    • The market for loanable funds
      • Supply and demand for loanble funds
      • Policy 1: Saving incentives
      • Policy 2: Investment incentives
      • Policy 3: Government budget deficits and surpluses
      • Case study: The history of U.S. government debt

  • Chapter 27. The Basic Tools of Finance (p. 577- 590)

    • Present value: Measuring the time value of money
      • FYI: The magic of compounding and the rule of 70
    • Managing Risk
      • Risk aversion
      • Markets for insurance
      • Diversification of firm-specific risk
      • The tradeoff between risk and return
    • Asset valuation
      • Fundamental analysis
      • The efficient-markets hypothesis
      • In the news: A cartoonist's guide to stock picking
      • Case study: Random walks and index funds
      • In the news: Is the efficient-markets hypothesis kaput?
      • Market irrationality

  • Chapter 28. Unemployment and Its Natural Rate (p. 593- 613)

    • Identifying unemployment
      • How is unemployment measured?
      • Case study: Labor-force participation of men and women in the U.S. economy
      • Does the unemployment rate measure what we want it to?
      • How long are the unemployed without work?
      • Why are there always some people unemployed?
      • FYI: The jobs number
    • Job search
      • Why some frictional unemployment is inevitable
      • Public policy and job search
      • Unemployment insurance
      • In the news: How much do the unemployed respond to incentives?
    • Minimum-wage laws
    • Unions and collective bargaining
      • The economics of unions
      • Are unions good or bad for the economy?
    • The theory of efficiency wages
      • Worker health
      • Worker turnover
      • Worker quality
      • Worker effort
      • Case study: Henry Ford and the very generous $5-a-day wage

  • Part Ten: Money and Prices in the Long Run

  • Chapter 29. The Monetary System (p. 619-640)

    • The meaning of money
      • The functions of money
      • The kinds of money
      • In the news: Mackereleconomics
      • Money in the U.S. economy
      • FYI: Why credit cards aren't money
      • Case study: Where is all the currency?
    • The Federal Reserve System
      • The Fed’s organization
      • The Federal Open Market Committee
    • Banks and the money supply
      • The simple case of 100 percent reserve banking
      • Money creation with fractional-reserve banking
      • The money multiplier
      • Bank capital, leverage, and the financial crisis of 2008-2009
    • The Fed’s tools of monetary control
      • How the Fed influences the quantity of reserves
      • How the Fed influences the reserve ratio
      • Problems in controlling the money supply
      • Case study: Bank runs and the money supply
      • The federal funds rate
      • In the news: Bernanke on the Fed’s toolbox

  • Chapter 30. Money Growth and Inflation (p. 643-664)

    • The classical theory of inflation
      • The level of prices and the value of money
      • Money supply, money demand, and monetary equilibrium
      • The effects of a monetary injection        
      • A brief look at the adjustment process
      • The classical dichotomy and monetary neutrality
      • Velocity and the quantity equation
      • Case study: Money and prices during four hyperinflations
      • The inflation tax
      • FYI: Hyperinflation in Zimbabwe
      • The Fisher effect
    • The costs of inflation
      • A fall in purchasing power? The inflation fallacy
      • Shoeleather costs
      • Menu costs
      • Relative-price variability and the misallocation of resources
      • Inflation-induced tax distortions
      • Confusion and inconvenience
      • A special cost of unexpected inflation: Arbitrary redistributions of wealth
      • Inflation is bad, but deflation may be worse
      • Case study: The Wizard of Oz and the free-silver debate
      • In the news: Inflationary threats

  • Part Eleven: The Macroeconomics of Open Economies

  • Chapter 31. Open-Economy Macroeconomics: Basic Concepts (p. 671-690)

    • The international flows of goods and capital
      • The flow of goods: Exports, imports, and net exports
      • Case study: The increasing openness of the U.S. economy
      • In the news: Breaking up the chain of production
      • The flow of financial resources: Net capital outflow
      • The equality of net exports and net capital outflow
      • Saving, investment, and their relationship to the international flows
      • Summing up
      • Case study: Is the U.S. trade deficit a national problem?
    • The prices for international transactions: Real and nominal exchange rates
      • Nominal exchange rates
      • FYI: The euro
      • Real exchange rates
    • A first theory of exchange-rate determination: Purchasing-power parity
      • The basic logic of purchasing-power parity
      • Implications of purchasing-power parity
      • Case study: The nominal exchange rate during a hyperinflation
      • Limitations of purchasing-power parity
      • Case study: The hamburger standard

  • Chapter 32. A Macroeconomic Theory of the Open Economy (p. 695-712)

    • Supply and demand for loanable funds and for foreign-currency exchange
      • The market for loanable funds
      • The market for foreign-currency exchange
      • FYI: Purchasing-power parity as a special case
    • Equilibrium in the open economy
      • Net capital outflow: The link between the two markets
      • Simultaneous equilibrium in two markets
      • FYI: Disentangling supply and demand
    • How policies and events affect an open economy

  • Part Twelve: Short-Run Economic Fluctuations

  • Chapter 33. Aggregate Demand and Aggregate Supply (p. 719-752)

    • Three key facts about economic fluctuations
      • Fact 1: Economic fluctuations are irregular and unpredictable
      • Fact 2: Most macroeconomic quantities fluctuate together
      • Fact 3: As output falls, unemployment rises
    • Explaining short-run economic fluctuations
      • The assumptions of classical economics
      • The reality of short-run fluctuations
      • In the news: The social influences of economic downturns
      • The model of aggregate demand and aggregate supply
    • The aggregate-demand curve
      • Why the aggregate demand curve slopes downward
      • Why the aggregate demand curve might shift
    • The aggregate-supply curve
      • Why the aggregate supply curve is vertical in the long run
      • Why the long-run aggregate supply curve might shift
      • Using aggregate demand and aggregate supply to depict long-run growth and inflation
      • Why the aggregate-supply curve slopes upward in the short run
      • Why the short-run aggregate supply curve might shift
    • Two causes of economic fluctuations

  • Chapter 34. The Influence of Monetary and Fiscal Policy on Aggregate Demand (p. 757-780)

    • How monetary policy influences aggregate demand
      • The theory of liquidity preference
      • The downward slope of the aggregate demand curve
      • FYI: Interest rates in the long run and the short run
      • Changes in the money supply
      • The role of interest-rate targets in Fed policy
      • FYI: The zero lower bound
      • Case study: Why the Fed watches the stock market (and vice versa)
    • How fiscal policy influences aggregate demand
      • Changes in government purchases
      • The multiplier effect
      • A formula for the spending multiplier
      • Other applications of the multiplier effect
      • The crowding-out effect
      • Changes in taxes
      • FYI: How fiscal policy might affect aggregate supply
    • Using policy to stabilize the economy

  • Chapter 35. The Short-Run Tradeoff between Inflation and Unemployment (p. 785-806)

    • The Phillips curve
      • Origins of the Phillips curve
      • Aggregate demand, aggregate supply, and the Phillips curve
    • Shifts in the Phillips curve: The role of expectations
      • The long-run Phillips curve
      • The meaning of "natural"
      • Reconciling theory and evidence
      • The short-run Phillips curve
      • The natural experiment for the natural-rate hypothesis
    • Shifts in the Phillips curve: The role of supply shocks
    • The cost of reducing inflation
      • The sacrifice ratio
      • Rational expectations and the possibility of costless disinflation
      • The Volcker disinflation
      • The Greenspan era
      • The Phillips curve during the financial crisis
      • In the news: Do we need more inflation?

  • Part Thirteen: Final Thoughts

  • Chapter 36. Six Debates over Macroeconomic Policy (p. 811-829)

    • Should monetary and fiscal policymakers try to stabilize the economy?
      • Pro: Policymakers should try to stabilize the economy
      • Con: Policymakers should not try to stabilize the economy
    • Should the government fight recessions with spending hikes rather than tax cuts?
    • Should monetary policy be made by rule rather than by discretion?
      • Pro: Monetary policy should be made by rule
      • Con: Monetary policy should not by made by rule
      • FYI: Inflation targeting
    • Should the central bank aim for zero inflation?
      • Pro: The central bank should aim for zero inflation
      • Con: The central bank should not aim for zero inflation
      • In the news: What is the optimal inflation rate?
    • Should the government balance the budget?
    • Should the tax laws be reformed to encourage saving?
      • Pro: The tax laws should be reformed to encourage saving
      • Con: The tax laws should not be reformed to encourage saving