Contents
Preface...... v
Part 1What Is Economics?...... 1
Chapter 1 Economic Issues and Concepts...... 2
Chapter 2 How Economists Work...... 7
Part 2An Introduction to Demand and Supply?...... 15
Chapter 3Demand, Supply, and Price...... 16
Chapter 4Elasticity...... 24
Chapter 5Markets in Action...... 34
Part 3Consumers and Producers...... 41
Chapter 6Consumer Behavior...... 42
Chapter 7Producers in the Short Run...... 51
Chapter 8Producers in the Long Run...... 61
Part 4Market Structure and Efficiency...... 69
Chapter 9Competitive Markets...... 70
Chapter 10Monopoly, Cartels, and Price Discrimination...... 77
Chapter 11Imperfect Competition and Strategic Behavior...... 86
Chapter 12Economic Efficiency and Public Policy...... 95
Part 5Factor Markets...... 103
Chapter 13 How Factor Markets Work...... 104
Chapter 14Labor Markets...... 112
Chapter 15 Interest Rates and the Capital Market...... 119
Part 6Government in the Market Economy...... 125
Chapter 16Market Failures and Government Intervention...... 127
Chapter 17The Economics of Environmental Protection...... 135
Chapter 18Taxation and Public Expenditure...... 142
Part 7An Introduction to Macroeconomics...... 151
Chapter 19What Macroeconomics Is All About...... 152
Chapter 20 The Measurement of National Income...... 158
Part 8The Economy in the Short Run...... 165
Chapter 21The Simplest Short-Run Macro Model...... 167
Chapter 22Adding Government and Trade to the Simple Macro Model...... 175
Chapter 23Aggregate Supply and Aggregate Demand in the Short Run...... 183
Part 9The Economy in the Long Run...... 193
Chapter 24 From the Short Run to the Long Run:
The Adjustment of Factor Prices...... 195
Chapter 25 The Difference Between Short-Run and Long-Run
Macroeconomics...... 203
Chapter 26 Long-Run Economic Growth...... 207
Part 10Money, Banking, and Monetary Policy...... 215
Chapter 27Money and Banking...... 216
Chapter 28Money, Interest Rates, and Economic Activity...... 223
Chapter 29Monetary Policy………………………………………………………………...231
Part 11Macroeconomic Problems and Policies...... 239
Chapter 30Inflation and Disinflation...... 240
Chapter 31Unemployment Fluctuations and the NAIRU...... 247
Chapter 32Government Debt and Deficits...... 254
Part 12The United States in the Global Economy...... 261
Chapter 33The Gains from International Trade...... 262
Chapter 34Trade Policy...... 268
Chapter 35Exchange Rates and the Balance of Payments...... 274
Preface
This Instructor’s Manual serves several functions. For instructors, it provides some help in staying ahead of the many burdens that a full teaching load imposes. For the authors, it provides an opportunity to talk directly to the teachers––to let you know what we had in mind, why we did some things differently in this edition (or in some cases differently than other books do them), and to share with you some of our experiences with teaching the material. Our general philosophy and approach are discussed in the Preface to our text, as are the major revisions in this thirteenth edition of Economics.
There are two types of endofchapter questions in our text, and both can play an important part in the learning process. The Study Exercises are questions designed for the student to work through on their own. These questions will give them practice drawing graphs, shifting curves, computing elasticities, understanding cost concepts, and so on. The Discussion Questions are designed to form the basis of classroom discussions—they are more open-ended than the Study Exercises.
Providing the answers to both sets of questions is one of the most important features of this Instructor’s Manual. The full answers to the Study Exercises, complete with graphs where appropriate, are provided. For the Discussion Questions, there is considerable variation in terms of complexity and in the degree to which there is clearly a “correct” answer. In some cases we have not tried to provide the “correct” answer—often there is none, or there are many—but we always try to identify the important issues that each question raises.
Please note that some of the Study Exercises are assignable in this text’s MyEconLab course ( These questions are marked in the textbook by a blue circle around the exercise number. By selecting only some of the Study Exercises for use in the MyEconLab course, you will still have the opportunity of using some of the questions for in-class quizzes, tests, or as homework assignments.
Finally, we have a simple request. If our book becomes more teachable from edition to edition, as we believe it does, much of the credit goes to teachers who call our attention to errors, omissions, difficulties in exposition, ambiguities, or organizational flaws. While we do not adopt every suggestion, we consider each carefully and act on a large fraction. If you have any suggestions, please write us so that we can continue to incorporate your ideas for improvements. Please send your comments by email to:
.We look forward to receiving your comments. Good teaching!
Richard Lipsey
Christopher Ragan
Paul Storer