Chapter
table 2.1 Labour’s productivity in England and Canada
table 2.2 Changes in world output
table 2.3 Percent in agreement with the proposition: ‘minimum wages increase unemployment among young and unskilled workers’
table 3.1 Types of market structure
table 3.2 Tax incidence applications used in ten major North American textbooks
table 4.1 Mary’s benefit from eating pizzas
table 5.1 Inputs and output in the short run (using 10 units of capital)
table 5.2 Costs in the short run
table 5.3 Downward-sloping demand and marginal revenue
table 6.1 A pay-off matrix illustrating the prisoner’s dilemma
table 6.2 Repeated plays when Esso plays ‘tit-for-tat’
table 7.1 Classification of types of goods
table 7.2 Percentage changes in age-standardized cancer incidence rates
table 9.1 Taxation as a percentage of GDP, OECD countries, 2005
table 9.2 Measures of income inequality
table 9.3 Distribution of household net worth
table 9.4 Percentage of children in households with less than half of median household income, circa 2000
table 10.1 International trade, 2007
table 10.2 Estimates of the stock of foreign direct investment, by sector, 2006
table 11.1 Conventional economics and the blank cells of Akerlof and Shiller
table 11.2 Conventional textbook economics and the blank cells of Robert Prasch
figure 1.1 Marginal thinking
figure 2.1 Wheat and cloth production in England and Canada
figure 2.2 Expanded consumption possibilities
figure 2.3 Different perceptions of reality
figure 3.1 Inelastic and elastic demand
figure 3.2 Movement towards equilibrium
figure 3.3 Comparative static analysis
figure 3.4 The effect of rent control
figure 3.5 The effect of a minimum wage
figure 3.6 The incidence of taxation
figure 3.7 Multiple equilibria in the labour market
figure 3.8 Self-fulfilling prophecies
figure 4.1 Marginal benefit and price
figure 4.3 Happiness in the United States, 1994–96, by income decile
figure 4.4 Happiness and per capita income across countries, 1999–2004
figure 4.5 Happiness in the United States, 1946–2008
figure 5.1 The law of diminishing marginal returns
figure 5.2 Marginal and averagec osts
figure 5.3 Marginal product and marginal cost
figure 5.4 Marginal benefit and market price
figure 5.5 Long-run average cost relationships
figure 5.6 The long-run equilibrium for the competitive firm
figure 5.7 Relationship between demand and marginal revenue
figure 5.8 Short-run marginal costs
figure 5.9 Long-run average cost with increasing and then constant returns to scale
figure 5.10 Why the competitive firm should raise its price above the market price
figure 6.1 Derivation of the competitive firm’s supply curve
figure 6.2 The short-run response to an increase in demand
figure 6.3 The long-run response to an increase in demand
figure 6.4 The optimal quantity
figure 6.5 Non-competitive firms don’t have a supply curve
figure 6.6 Monopoly versus perfect competition
figure 6.7 Price ceilings and monopoly
figure 6.8 Natural monopoly
figure 6.9 Monopolistic competition
figure 6.10 Estimating the deadweight loss
figure 6.11 Aggregate stock price bubbles
figure 7.1 Markets are inefficient in the presence of externalities
figure 7.2 Cancer incidence per 100,000 males, age-standardized rates
figure 7.3 Cancer incidence per 100,000 females, age-standardized rates
figure 8.1 Competitive determination of the wage of welders
figure 8.2 Two types of unions in otherwise competitive markets
figure 8.3 Monopsony in the labour market
figure 8.4 Monopsony with minimum wage
figure 8.5 The adding-up problem
figure 8.6 Reswitching produces the possibility of multiple equilibria
figure 8.7 Derivation of a competitive firm’s upward-sloping supply of labour schedule
figure 8.8 Average executive pay relative to average wages in the USA
figure 8.9 Dow Jones Industrial Average and CEO pay relative to average pay, 1970–2002
figure 9.1 The Lorenz curve
figure 9.2 The equity–efficiency trade-off
figure 9.3 Income distribution and equality
figure 9.4 The equity–growth trade-off
figure 9.5 Relative risk of CHD death excluding other risk factors
figure 9.6 The social gradient of health
figure 10.1 The effects of a tariff
figure 10.2 Average costs of producing nails in two countries
The textbooks and the Anti-Textbook
Suggestions for further reading
1 | What is economics? Where you start influences where you go
1.1 Economics is the science of choice
1.4 Marginal thinking: costs and benefits
figure 1.1 Marginal thinking
1.5 Rational and self-interested individuals
1.6 Markets are usually a good way to organize economic activity
1.7 Governments can sometimes improve market outcomes
1.8 Another government role: providing equity
1.9 The efficiency–equity trade-off
1.10 A word on methodology
2.1 The inherent tension with macroeconomics
2.2 Scarcity and unlimited wants
2.3 The individual versus the community
2.4 The individual versus the corporation
2.5 The trade-off between efficiency and equity reconsidered
2.6 Reconsidering the assumption of rationality
2.7 Behavioural economics
Suggestions for further reading
2 | Introducing economic models
1.1 Model building and model testing
1.2 Examples of economic models
table 2.1 Labour’s productivity in England and Canada
figure 2.1 Wheat and cloth production in England and Canada
table 2.2 Changes in world output
figure 2.2 Expanded consumption possibilities
1.3 Positive and normative economics
2.1 Textbooks fudge their own methodology
2.2 Predictive power isn’t all it is cracked up to be
table 2.3 Percent in agreement with the proposition: ‘minimum wages increase unemployment among young and unskilled workers’
2.3 Core propositions are incapable of refutation
2.4 Economics is the art of rhetoric
2.5 Paradigms and ideology
figure 2.3 Different perceptions of reality
2.6 Evaluating comparative advantage
Suggestions for further reading
3 | How markets work (in an imaginary world)
1.1 What is a competitive market?
figure 3.1 Inelastic and elastic demand
figure 3.2 Movement towards equilibrium
1.5 Comparative static analysis
figure 3.3 Comparative static analysis
1.6 A government-regulated price ceiling: rent controls
figure 3.4 The effect of rent control
1.7 A government-regulated price floor: minimum wages
figure 3.5 The effect of a minimum wage
1.8 Who bears the cost of sales taxes?
figure 3.6 The incidence of taxation
1.9 The costs of taxation
2.1 The demand and supply model is sold as a generic tool
2.2 How many markets are perfectly competitive?
table 3.1 Types of market structure
2.3 Is the competitive model a useful approximation?
table 3.2 Tax incidence applications used in ten major North American textbooks
2.4 But don’t price floors cause surpluses and price ceilings shortages?
2.5 What the texts don’t tell you about the competitive model
figure 3.7 Multiple equilibria in the labour market
figure 3.8 Self-fulfilling prophecies
Suggestions for further reading
Addendum: the indeterminate and unstable economy
table 4.1 Mary’s benefit from eating pizzas
figure 4.1 Marginal benefit and price
2.1 What if preferences are not ‘given’?
2.2 Incomplete and asymmetric information
2.3 Preferences and relative position
figure 4.3 Happiness in the United States
figure 4.4 Happiness and per capita income across countries
figure 4.5 Happiness in the United States
Suggestions for further reading
table 5.1 Inputs and output in the short run
figure 5.1 The law of diminishing marginal returns
table 5.2 Costs in the short run
figure 5.2 Marginal and average costs
figure 5.3 Marginal product and marginal cost
figure 5.4 Marginal benefit and market price
figure 5.5 Long-run average cost relationships
figure 5.6 The long-run equilibrium for the competitive firm
table 5.3 Downward-sloping demand and marginal revenue
figure 5.7 Relationship between demand and marginal revenue
2.1 What do firms’ costs actually look like?
figure 5.8 Short-run marginal costs
figure 5.9 Long-run average cost with increasing and then constant returns to scale
2.2 The equilibrium of the perfectly competitive firm, re-examined
figure 5.10 Why the competitive firm should raise its price abovethe market price
2.3 Shaping the external environment: using power for profit
2.4 Power within the firm
2.5 Summing up: the firm in the textbook and the firm in reality
Suggestions for further reading
6 | Market structure and efficiency – or why perfect competition isn’t so perfect after all
1.1 Types of market structure
figure 6.1 Derivation of the competitive firm’s supply curve
figure 6.2 The short-run response to an increase in demand
figure 6.3 The long-run response to an increase in demand
figure 6.4 The optimal quantity
figure 6.6 Monopoly versus perfect competition
1.3 Non-competitive markets: there is no supply curve
figure 6.5 Non-competitive firms don’t have a supply curve
figure 6.7 Price ceilings and monopoly
figure 6.8 Natural monopoly
1.5 Other market structures
figure 6.9 Monopolistic competition
table 6.1 A pay-off matrix illustrating the prisoner’s dilemma
table 6.2 Repeated plays when Esso plays ‘tit-for-tat’
2.1 Can something be ideal if it is not equitable?
2.2 Static efficiency is less important than dynamic efficiency
2.3 Perfect competition is flawed even as a standard of static efficiency
2.4 The textbooks concede the point
figure 6.10 Estimating the deadweight loss
2.6 The omitted legal framework
Suggestions for further reading
Addendum: what about the efficiency of asset markets?
The efficient market hypothesis (EMH)
The efficient market hypothesis and the behavioural economists
figure 6.11 Aggregate stock price bubbles
Micro near-efficiency and macro inefficiency
7 | Externalities and the ubiquity of market failure
figure 7.1 Markets are inefficient in the presence of externalities
table 7.1 Classification of types of goods
2.1 Externalities in reality
table 7.2 Percentage changes in age-standardized cancer incidence rates
figure 7.2 Cancer incidence per 100,000 males, age-standardized rates
figure 7.3 Cancer incidence per 100,000 females, age-standardized rates
2.2 Externalities and the profit motive
2.3 Summing up: externalities and the market economy
Suggestions for further reading
8 | The marginal productivity theory of income distribution – or you’re worth what you can get
1.2 Demand for factors of production
1.3 Determination of wages in a perfectly competitive labour market
figure 8.1 Competitive determination of the wage of welders
1.4 Wage differentials in competitive labour markets
figure 8.2 Two types of unions in otherwise competitive markets
1.5 Monopsonistic labour markets
table 8.1 Marginal cost of labour for a monopsonist
figure 8.3 Monopsony in the labour market
figure 8.4 Monopsony with minimum wage
1.6 The returns to capital
figure 8.5 The adding-up problem
2.1 Does marginal productivity legitimize the actual distribution of income?
2.2 Theoretical problems with the standard textbook story
figure 8.6 Reswitching produces thepossibility of multiple equilibria
2.3 The fuzziness of marginal productivity theory
2.4 Empirical testing of the competitive model
2.5 The importance of fairness and status
2.6 The monopsony model of the labour market
figure 8.7 Derivation of a competitive firm’s upward-sloping supply of labour schedule
2.7 CEO and management compensation
figure 8.8 Average executive pay relative to average wages in the USA
figure 8.9 Dow Jones Industrial Average and CEO pay relative to average pay
Suggestions for further reading
9 | Government, taxation and the (re)distributionof income: is a just society just too expensive?
1.1 The costs of taxation
1.2 Taxes: an international comparison
table 9.1 Taxation as a percentage of GDP, OECD countries, 2005
1.3 The distribution of income and wealth
figure 9.1 The Lorenz curve
table 9.2 Measures of income inequality
table 9.3 Distribution of household net worth
table 9.4 Percentage of children in households with less than half of median household income, circa 2000
1.5 Income redistribution
figure 9.2 The equity–efficiency trade-off
2.1 The subtle bias against government and against redistribution
figure 9.3 Income distribution and equality
2.2 The equity–efficiency trade-off, reconsidered
figure 9.4 The equity–growth trade-off
2.3 The pervasive costs of inequality
figure 9.5 Relative risk of CHD death excluding other risk factors
figure 9.6 The social gradient of health
Suggestions for further reading
10 | Trade and globalization without the rose-tinted glasses
1.1 The extent and growth of international trade
1.2 The economics of tariffs and import protection
table 10.1 International trade, 2007
figure 10.1 The effects of a tariff
1.3 The argument for free trade
1.4 Arguments for protecting domestic production against foreign imports
1.5 Illegitimate arguments for protection
1.6 The global trading system
2.1 Problems with the textbook model
2.2 Relaxing the textbook’s assumptions
figure 10.2 Average costs of producing nails in two countries
2.3 What’s missing from the textbooks
table 10.2 Estimates of the stock of foreign direct investment, by sector, 2006
Suggestions for further reading
The distinction between positive and normative economics
table 11.1 Conventional economics and the blank cells of Akerlof and Shiller
The goals of equity and efficiency
The assumption that more is better
Overemphasis on perfectly competitive markets
Textbooks ignore their own ideological leanings
The central idea that smaller government is better
Downplaying the importance of the legal framework within which markets operate
table 11.2 Conventional textbook economics and the blank cells of Robert Prasch
The presumption in favour of free trade
The omission of community
Downplaying the ecological crisis facing the planet today
Critical thinking about economics
Suggestions for further reading
Postscript: a case study on the global financialmeltdown
The importance of imperfect and asymmetric information
The role of externalities
Interest rates aren’t always at their market clearing level
The importance of the regulatory framework and the impact of deregulation
Deregulation or evolution?
Suggestions for further reading
to Introduction, chapters 1 and 2
to chapter 11 and Postscript
The Economics Anti-Textbook
：A Critical Thinker's Guide to Microeconomics
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