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Microeconomics Special Topic 1—Government Spending and Taxation MULTIPLE CHOICE 1. Between 1960 and 2010, the share of federal spending allocated to national defense a. declined sharply, while the share allocated to health care increased substantially. b. rose sharply, while the […]

17 Part 2 Text Overview This section, which is organized by chapter, has several features. First, an outline of the text is provided. Second, a brief summary of the important points of each chapter and tips on how best to […]

Microeconomics Chapter 1—The Economic Approach MULTIPLE CHOICE 1. What do economists mean when they state that a good is scarce? a. There is a shortage or insufficient supply of the good at the existing price. b. It is impossible to […]

a. confuses positive and normative analysis. b. commits the fallacy of composition. c. fails to recognize that association is not causation. d. confuses macroeconomics with microeconomics. 159. Someone notices that sunspot activity is high just prior to recessions and concludes […]

a. change that involves little, if anything, that is important. b. large, significant adjustment. c. change for the worse, and so it is usually a short-term change. d. small, incremental adjustment. 99. People are willing to pay more for a […]

161. Given the cost and demand conditions depicted in Figure 10-10 for the competitive price-searcher firm, what is the price that the firm should charge if it wants to maximize its profit? a. 20 b. 30 c. 40 d. 50 […]

Chapter 10 Dynamic Change, Economic Fluctuations, and the AD-AS Model OUTLINE I. Anticipated and Unanticipated Changes A. Anticipated changes are foreseen by economic participants. Decision makers have time to adjust to them before they occur. B. Unanticipated changes catch people […]

Microeconomics Chapter 10—Price-Searcher Markets with Low Entry Barriers MULTIPLE CHOICE 1. In a competitive price-searcher market, the firms will a. be able to choose their price, and the entry barriers into the market will be low. b. be able to […]

b. higher short-run prices, short-run profits, and the entry of additional firms into the market. c. higher short-run prices and the exit of firms from the market due to economies of scale. d. no change in prices in the short […]

Microeconomics Special Topic 10—Do Labor Unions Increase the Wages of Workers? MULTIPLE CHOICE 1. Since 1970, union membership, as a percent of the labor force, has a. remained virtually unchanged. b. increased slightly. c. declined steadily. d. increased significantly. 2. […]

118 Chapter 11 Fiscal Policy: The Keynesian View and Historical Perspective OUTLINE I. The Great Depression and Macro-Adjustment Process A. The Great Depression and Keynesian Economics 2. Keynesian theory provided an explanation for the severe and prolonged unemployment of the […]

172. The demand and cost conditions in an industry are as depicted in Figure 11-8. In the viewpoint of economic efficiency, what would the ideal price and output be? a. price, $10; quantity produced, 100 b. price, $15; quantity produced, […]

93. Suppose Ford, GM, and Dodge make the majority of pick-up trucks sold in the United States If they all sell for approximately the same price, and Ford offers a $2,000 rebate on new truck sales, what can Ford expect […]

Microeconomics Special Topic 11—The Question of Resource Exhaustion MULTIPLE CHOICE 1. Predictions of severe shortages due to impending natural resource depletion a. are widely accepted by resource economists even though such predictions are a relatively new occurrence. b. have been […]

Microeconomics Chapter 11 A—Price-Searcher Markets with High Entry Barriers MULTIPLE CHOICE 1. When economists talk about a barrier to entry, they are referring to a. a factor that makes it difficult for potential competitors to enter a market. b. the […]

Microeconomics Chapter 11 B—Price-Searcher Markets with High Entry Barriers MULTIPLE CHOICE 230. For which of the following reasons do regulatory agencies sometimes fail to bring the price and output of a natural monopoly to the ideal level? a. The regulatory […]

124 Chapter 12 Fiscal Policy, Incentives, and Secondary Effects OUTLINE I. Fiscal Policy, Borrowing, and the Crowding-Out Effect A. Crowding-out Effect indicates that the increased borrowing to finance a budget deficit will increase real interest rates and thereby retard private […]

Microeconomics Chapter 12—The Supply of and Demand for Productive Resources MULTIPLE CHOICE 1. The demand curve for a human resource will be more elastic the a. more and better substitutes are available for it. b. more difficult it is to […]

b. 3 c. 4 d. 5 94. A decrease in the marginal product of labor would be represented by a. increase in labor demand. b. decrease in labor demand. c. increase in the quantity demanded of labor. d. decrease in […]

b. increases from 3,000 to 10,000. c. decreases from 10,000 to 3,000. d. decreases from 6,000 to 3,000. The figure below depicts a production function for a firm that produces cookies. Figure 12-4 150. Refer to Figure 12-4. As the […]

Microeconomics Special Topic 12—Difficult Environmental Cases and the Role of Government MULTIPLE CHOICE 1. When it is difficult to assign and enforce property rights, a. markets result in outcomes that are often inefficient. b. courts can easily negotiate efficient outcomes. […]

129 Chapter 13 Money and the Banking System OUTLINE I. What is Money? A. Medium of Exchange B. Store of Value C. Unit of Account II. How the Supply of Money Affects Its Value A. The main thing that makes […]

Microeconomics Chapter 13—Earnings, Productivity, and the Job Market MULTIPLE CHOICE 1. If all persons had identical preferences and productivity factors (ability, skill level, education, experience, etc.), the highest paying jobs would be the most a. prestigious. b. convenient. c. undesirable. […]

60. The real wages of workers will tend to be high when a. output per worker is high. b. capital is scarce. c. industries are automating at a slow rate. d. profits are low. ANS: A PTS: 1 DIF: Moderate […]

Chapter 14 Modern Macroeconomics and Monetary Policy OUTLINE I. The Impact of Monetary Policy: A Brief Historical Background A. A Brief Historical Background 1. Keynesian View: Dominated during the 1950s and 1960s, Keynesians argued that money supply does not matter […]

70. If profit-seeking major oil companies began to use current profits from the oil business to buy department stores and hotel chains, economic analysis suggests that a. oil company profits were high relative to other possible investment opportunities. b. oil […]

Microeconomics Chapter 14—Investment, the Capital Market, and the Wealth of Nations MULTIPLE CHOICE 1. Which of the following is true of saving and investment? a. There is no relationship between saving and investment; people can invest without having to save. […]

Chapter 15 Stabilization Policy, Output, and Employment OUTLINE I. Economic Fluctuations The Historical Record A. Historically, the United States has experienced substantial swings in real output. B. Prior to the Second World War, year-to-year changes in real GDP of 5 […]

Microeconomics Chapter 15—Income Inequality and Poverty MULTIPLE CHOICE 1. In 2009, high-income families (the top 20 percent) in the United States earned approximately ____ percent of the total before-tax income. a. 34 b. 48 c. 62 d. 79 2. Imagine […]

76. The Earned Income Tax Credit a. tends to increase income inequality. b. is a program that provides additional income to workers with above-average incomes. c. tends to reduce income inequality. d. is both a and b. 77. Which of […]

Chapter 16 Creating an Environment for Growth and Prosperity OUTLINE I. History of Economic Growth A. Per Capita Income: The Last 1000 years 1. Income stagnated for the 800 years following year 1000, but growth has exploded during the last […]

159 Chapter 17 Institutions, Policies, and Cross-Country Differences in Income and Growth OUTLINE I. How Large are the Income Differences Across Countries? A. Purchasing power parity comparisons indicate that the per person income in wealthy countries such as the United […]

Chapter 18 (16 Micro) Gaining From International Trade OUTLINE I. The Trade Sector of the United States A. The size of the trade sector has grown rapidly in recent years. B. Both exports and imports were approximately 10 percent of […]

Chapter 19 (17 Micro) International Finance and the Foreign Exchange Market OUTLINE I. Foreign Exchange Market A. Market where one currency is trade for another. B. The exchange rate enables people one country to translate the prices of foreign goods […]

94. Which of the following most accurately indicates the implications of an economy’s production possibilities curve? a. If all the resources of an economy are being used efficiently, more of one good can be produced only if less of another […]

Chapter 2 Some Tools of the Economist OUTLINE I. What Shall We Give Up? A. Opportunity Cost 1. Opportunity cost a. The highest-valued activity sacrificed in making a choice. b. Opportunity costs are subjective and vary across individuals. 2. The […]

Microeconomics Chapter 2 B—Some Tools of the Economist MULTIPLE CHOICE Use the figure to answer the following question. Figure 2-11 225. In Figure 2-11, which shows the production possibilities curve, a. A is efficient. b. B is inefficient. c. C […]

Microeconomics Chapter 2 A—Some Tools of the Economist MULTIPLE CHOICE 1. Which of the following sayings best reflects the concept of opportunity cost? a. “You can’t teach an old dog new tricks.” b. “Time is money.” c. “I have a […]

Table 2-1 Lebos Food Clothing 0 6 2 4 4 2 6 0 Slavia Food Clothing 0 9 1 6 2 3 3 0 170. Refer to Table 2-1. Which of the following is true? a. Lebos has the comparative […]

Microeconomics Special Topic 2—The Economics of Social Security MULTIPLE CHOICE 1. The payments made to the beneficiaries of the Social Security program are financed by a. insurance premiums previously paid into the system by the beneficiaries. b. current receipts derived […]

183 Chapter 20 (7 Micro) Consumer Choice and Elasticity OUTLINE I. The Fundamentals of Consumer Choice A. Fundamentals of Consumer Choice 2. Consumers make choices purposefully. 3. One good can be substituted for another. 4. Consumers must make decisions without […]

195 Chapter 21 (8 Micro) Costs and the Supply of Goods OUTLINE I. Organization of the Business Firm A. Incentives, Cooperation, and Nature of the Firm 1. In a market economy, firm owners are residual claimants. a. They have right […]

207 Chapter 22 (9 Micro) Price Takers and the Competitive Process OUTLINE I. Price Takers and Price Searchers A. Price Takers 1. Price Takers produce identical products and each seller is small relative to the market. B. Price Searchers 1. […]

Chapter 23 (10 Micro) Price-Searcher Markets with Low Entry Barriers OUTLINE I. Competitive Price-Searcher Markets A. Firms in price-searcher markets with low entry barriers face a downward-sloping demand curve. 1. Firms are free to set price, but face strong competitive […]

Chapter 24 (11 Micro) Price-Searcher Markets with High Entry Barriers OUTLINE I. Why Are Entry Barriers Sometimes High? A. Entry Barriers 1. Economies of Scale 2. Government Licensing 3. Patents 4. Control Over an Essential Resource II. Characteristics of Monopoly […]

Chapter 25 (12 Micro) The Supply and Demand for Productive Resources OUTLINE 1. Introduction A. Productive assets are bought and sold in resource markets. B. These markets help determine what is produced, how it is produced, and the distribution of […]

Chapter 26 (13 Micro) Earnings, Productivity, and the Job Market OUTLINE 1. Why Do Earnings Differ? A. Earnings would be equal if: 1. all individuals were identical. 2. all jobs were equally attractive. 3. workers were perfectly mobile among jobs. […]

251 Chapter 27 (14 Micro) Investment, the Capital Market, and the Wealth of Nations OUTLINE I. Why People Invest A. Capital and Investment 1. Types of capital: 2. Investment: purchase, consumption, or development of a capital resource. 3. Saving is […]

263 Chapter 28 (15 Micro) Income Inequality and Poverty OUTLINE I. How Much Income Inequality Exists in the United States A. Inequality in Money Income in the United States B. A Closer Look at Factors Influencing Income Distribution 2. Young, […]

Microeconomics Chapter 3 B—Supply, Demand, and the Market Process MULTIPLE CHOICE 226. Suppose prices for new homes have risen and sales of new homes have also risen. We can conclude that a. the demand for new homes has risen. b. […]

Chapter 3 Supply, Demand, and the Market Process OUTLINE I. Consumer Choice and Law of Demand A. Law of Demand 1. Law of Demand: There is an inverse relationship between the price of a good and the quantity consumers are […]

345. Refer to Figure 3-22. Which of the four graphs represents the market for pizza delivery in a college town as we go from summer to the beginning of the fall semester? a. A b. B c. C d. D […]

166. In which statement(s) is “supply” used correctly? (I) “An increase in the price of eggs will increase the supply of eggs.” (II) “As the cost of producing eggs rises, the supply of eggs will tend to fall.” a. in […]

Microeconomics Chapter 3 A—Supply, Demand, and the Market Process MULTIPLE CHOICE 1. Which of the following would most likely increase the demand for peanut butter? a. a decrease in the price of jelly, a good that is often used with […]

Microeconomics Special Topic 3—The Stock Market: Its Function, Performance, and Potential as an Investment Opportunity MULTIPLE CHOICE 1. Which of the following is true? a. Most stockholders own stock because they want to run the business. b. The shareholders of […]

c. shift to the left. d. do none of the above 97. If a decrease in the price of good Y causes the demand for good Z to decrease, this indicates that a. Y and Z are complements. b. Y […]

302. In Figure 3-7, suppose D1 and S1 indicate the initial conditions in the market for ice cream. Which of the following changes would tend to cause the shift from D1 to D2 in the market for ice cream? a. […]

Microeconomics Special Topic 4—Great Debates in Economics: Keynes Versus Hayek MULTIPLE CHOICE 1. The General Theory of John Maynard Keynes exerted a major impact on macroeconomics during the 20th century primarily because a. it provided the only logically consistent view […]

Microeconomics Chapter 4 A—Supply and Demand: Applications and Extensions MULTIPLE CHOICE 1. Other things constant, a decrease in the demand for computers will a. increase the price of computers. b. increase the quantity supplied of computers. c. increase the demand […]

Chapter 4 Supply and Demand: Applications and Extensions OUTLINE I. The Link Between Resource and Product Markets A. The markets for resources and products are closely linked. 1. Changes in one will affect the other. a. An increase (decrease) in […]

d. lump-sum taxes. 100. If the government wants to generate large revenues from placing a tax on the consumption of a particular good, it should choose a good for which a. the demand is price elastic b. the demand is […]

Microeconomics Chapter 4 B—Supply and Demand: Applications and Extensions MULTIPLE CHOICE Figure 4-14 234. Figure 4-14 depicts the milk market. The horizontal line, P, represents a price ceiling imposed by the government. Which of the following is true? a. In […]

279. Refer to Figure 4-25. The equilibrium price before the tax is imposed is a. P1. b. P2. c. P3. d. impossible to determine from the figure. 280. Refer to Figure 4-25. The price that buyers pay after the tax […]

184. The actual benefit of a government subsidy is determined primarily by a. the elasticities of demand and supply. b. the legal (or statutory) assignment of the subsidy c. the number of exchanges that are made possible as a result […]

c. Decision makers in the market are motivated by self-interest, whereas, political decision makers are primarily motivated by the desire to help others. d. Public goods tend to be undersupplied through the market since it is difficult for potential suppliers […]

63 Chapter 5 The Economic Role of Government OUTLINE I. A Closer Look at Economic Efficiency A. Economists often use the concept of efficiency to judge actions because the efficient use of resources implies the maximum value of output from […]

Microeconomics Chapter 5—Difficult Cases for the Market and the Role of Government MULTIPLE CHOICE 1. Which of the following is the most fundamental function of government? a. protection of individuals and their property b. imposing progressive taxes to fund income-transfer […]

Microeconomics Special Topic 5—The Crisis of 2008: Causes and Lessons for the Future MULTIPLE CHOICE 1. An analysis of housing prices between 1987 and 2008 indicates that prices a. increased sharply in the five years leading up to the housing […]

the legislator to arrange for pork-barrel projects that provide concentrated benefits for his district. c. Logrolling increases the likelihood that pork-barrel projects will be approved. d. All of the above are correct. 92. Legislation that offers immediate and easily recognized […]

75 Chapter 6 The Economics of Collective Decision Making OUTLINE I. The Size and Growth of the U.S. Government A. Total government spending accounted for only 9.4% of GDP in 1930, and only one third of this spending was at […]

135. Refer to Scenario 6-1. This statement is probably a. incorrect because voters are well informed on a wide range of political issues. b. incorrect because the political process dilutes the influence of special interest groups, because like other citizens, […]

Microeconomics Special Topic 6—Lessons from the Great Depression MULTIPLE CHOICE 1. “The Great Depression was caused by the 1929 stock market crash.” Which of the following is an indication that this statement is false? a. The stock market had regained […]

Microeconomics Chapter 6—The Economics of Collective Decision-Making MULTIPLE CHOICE 1. In 2008, the combined expenditures of federal, state, and local governments in the United States were approximately a. 14 percent of GDP. b. 24 percent of GDP. c. 35 percent […]

Chapter 7 OUTLINE I. GDP A Measure of Output A. Gross Domestic Product (GDP) is the market value of final goods and services produced within a country during a specific time period, usually a year. B. What Counts toward GDP? […]

Figure 7-11 162. Refer to Figure 7-11. As price falls from PA to PB, which demand curve represents the most elastic demand? a. D1 b. D2 c. D3 d. All of the above are equally elastic. ANS: A PTS: 1 […]

93. Compared to the long run, consumers typically ____ to price changes in the short run. a. are very responsive b. are more demand sensitive c. are less demand sensitive d. do not respond at all e. overreact ANS: C […]

Microeconomics Special Topic 7—The Economics of Healthcare MULTIPLE CHOICE 1. Real expenditures on Medicare and Medicaid a. rose during the 1970s and 1980s, but they have been declining since 1990. b. fell during the 1970s and 1980s, but they have […]

Microeconomics Chapter 7—Consumer Choice and Elasticity MULTIPLE CHOICE 1. If Mr. Smith thinks the last dollar spent on shirts yields less satisfaction than the last dollar spent on cola, and Smith is a utility-maximizing consumer, he should a. decrease his […]

Chapter 8 Economic Fluctuations, Unemployment, and Inflation OUTLINE I. Swings in the Economic Pendulum A. A Hypothetical Business Cycle 1. The phases of the business cycle are: expansion, peak (or boom), contraction, and recessionary trough. 2. The duration of business […]

Microeconomics Chapter 8 A—Costs and the Supply of Goods MULTIPLE CHOICE 1. Which of the following is most likely to be an implicit cost of production? a. property taxes on a building owned by the firm b. transportation costs paid […]

ANS: The obvious explicit costs would include the price of the stand, the lemons, sugar, water, sign, etc. It may also require the purchase of a license and the paying of taxes, depending on the government regulations of the particular […]

Microeconomics Special Topic 8—Education: Problems and Performance MULTIPLE CHOICE 1. Between 1970 and 2009, the achievement scores of American students ____, and real spending per student in American public elementary and secondary schools ____. a. rose; fell b. rose; rose […]

98. Marginal cost is defined as the increase in total cost resulting from an increase in a. one unit of output. b. output of 100 units. c. a firm’s plant size. d. one unit of labor. ANS: A PTS: 1 […]

164. At what output does the firm depicted in Figure 8-6 begin to experience diminishing marginal returns to its variable factors of production? a. q1 b. q2 c. q3 d. an output beyond q3 165. At what output does the […]

Microeconomics Special Topic 9—Earnings Differences Between Men and Women MULTIPLE CHOICE 1. Since 1980, the female/male annual earnings ratio of full-time workers has been ____, while the labor force participation rate of women has been ____ during this same period. […]

91. A firm is currently operating where the MC of the last unit produced is $84, and the MR of this unit is $70. What would you advise this firm to do? a. Shut down. b. Increase output. c. Stay […]

Chapter 9 An Introduction to Basic Macroeconomic Markets OUTLINE I. Understanding Macroeconomics: Our Game Plan A. As a basic macroeconomic model is developed, we will have some assumptions. 1. The Money Supply is constant. 2. Taxes and expenditures are constant. […]

Microeconomics Chapter 9 B—Price Takers and the Competitive Process MULTIPLE CHOICE 238. Competitive price-taker markets are characterized by a. low entry barriers and a large number of firms selling a homogeneous product. b. intense rivalry among firms selling differentiated products. […]

Microeconomics Chapter 9 A—Price Takers and the Competitive Process MULTIPLE CHOICE 1. Which of the following is a primary difference between price searchers and price takers? a. Price searchers maximize profits, but price takers do not. b. Price searchers have […]

a. output, 3; maximum profit, $3 loss b. output, 5; maximum profit, zero c. output, 5; maximum profit, slightly less than $5 d. output, 6; maximum profit, slightly less than $6 176. If the market price in Figure 9-5 fell […]

1 Part 1 Introduction This section has four parts. First, a summary of the supplements and packages available for instructors is included. Second, a discussion of the main features of PowerPoint and how to use it in the classroom is […]

396 Part 3/ Microeconomics Examination Advancement Placement Level Microeconomics Examination 1. A production possibility curve might be shifted outward by each of the following EXCEPT (A) an increase in immigration. (B) a movement toward a more open approach to free […]

313 Part 3 AP Microeconomics This section has six parts. Each of the first five parts corresponds to a unit on the AP Microeconom- ics exam. Each unit part provides a syllabus outline for teaching the unit, information regarding the […]

Teaching Unit II : The Market The second unit of instruction entails the content areas of The Nature and Functions of Product Markets as detailed in the AP* Economics Course Description1 (Content Area II, A-B) and includes topics of Market […]

Teaching Unit III: The third unit of instruction entails the content areas of Nature and Functions of Product Markets, as detailed in the AP* Economics Course Description1 (Content Area II, C-D) I. Plan NOTE: Chapters and pages in (parenthesis) denote […]

Teaching Unit IV. Market Structures: Price Takers & Price Searchers. The fourth unit of in- struction entails the content areas of Nature and Functions of Product Markets, as detailed in the AP* Economics Course Description1 (Content Area II, D and […]

370 Part 3/Unit IV recognize ATC pricing, MC pricing, and monopolist pricing strategies, given a novel mo- Tasks related to oligopoly and game theory predict impact on prices given two collusive firms recognize conditions of an oligopoly industry/firm analyze the […]

Teaching Unit V- Factor Markets. The fifth unit of instruction entails the content areas of Fac- tor Markets as detailed in the AP* Economics Course Description1 (Content Area III, A-D) and includes topics of Market Failure and the Role of […]

Part 4/Macroeconomics Examination 521 Advancement Placement Level Macroeconomics Examination 1. Which of the following correctly describes the components of aggregate demand? (A) consumption expenditures + investment expenditures + government expenditures + exports + imports (B) consumption expenditures + investment expenditures […]

416 Part 4 AP Macroeconomics This section has six parts. Each of the first five parts corresponds to a unit on the AP Macroeconomics exam. Each unit part provides a syllabus outline for teaching the unit, information regarding the concepts […]

Part 4/Unit I 427 2008, draws graph showing impact of an effective price ceiling on price and quantity Sample Multiple-Choice Questions for Macro Unit I 1. The central economic problem faced by all economies of the world is (A) balancing […]

437 Teaching Unit II: Measuring Economic Performance. The second unit of instruction entails the content area of Measurement of Economic Performance as detailed in the AP* Economics Course Description1 (Content Area II, A-C) I. Plan Teaching Materials Instructors Manual Coursebook […]

Teaching Unit III: Models of Economic Performance. Unit III entails the content area of National Income and Price Determination as detailed in the AP* Economics Course Description1 (Content Area III, A-C) TEACHER NOTE: Short run stabilization policies, or fiscal policy, […]

458 Part 4/Unit III 2006, use an AS/AD graph to show a short run equilibrium below FE; output and price levels; evaluate the impact of an increase in an input cost on the AS/AD model and explain impact on SRAS, […]

Part 4/Unit IV 469 I. Plan Teaching Materials Instructors Manual Text readings Chapter 13, Money and the Banking System Chapter 12, Money and the Banking System Chapter 14, Modern Macroeconomics and Monetary Policy Chapter 13, Modern Macroeconomics and Monetary Policy […]

Part 4/Unit V 483 Teaching Unit V: Stabilization & Growth Policies: Unit V entails the content area of Inflation, Unemployment, and Stabilization Policies (Content Area V, A-B) and Economic Growth and Productivity (Content Area VI, A-D) 1 I. Plan (Four […]

Part 4/Unit V 495 2003- identify expansionary OMO and shows SR effects on AS/AD price levels and output as well as interest rates 2004, impact of federal deficit on loanable fund markets and impact on real interest rate with economic […]

507 Teaching Unit VI: International Economics. Unit VI entails the content area of Open Economy: International Trade and Finance (Content Area VII, A-D) 1 I. Plan Teaching Materials Instructors Manual Text readings Gaining from International Trade, Chapter 17 Chapter 18, […]

269 Special Topic 1 Government Spending and Taxation OUTLINE I. Government Expenditures A. Government spending includes both purchases of goods and services and income transfers. 1. About three-fifths of government spending takes place at the federal level. Four categories income […]

273 Special Topic 2 The Economics of Social Security OUTLINE I. Introduction to the U.S. Social Security Program A. Offers protection against the loss of income that usually accompanies old age or the death of a breadwinner. B. It is […]

277 Special Topic 3 The Stock Market: Its Function, Performance, and Potential as an Investment Opportunity OUTLINE I. The Economic Functions of the Stock Market A. The stock market provides investors, including those who are not interested in participating directly […]

281 Special Topic 4 Great Debates in Economics: Keynes Versus Hayek OUTLINE I. Keynes and Hayek A. Keynes and Hayek 1. John Maynard Keynes and Friedrich Hayek are giants in the economics profession. Their theories and ideas represent contrasting alternative […]

283 Special Topic 5 The Crisis of 2008: Causes and Lessons for the Future OUTLINE I. The Crisis of 2008 A. The headlines of 2008 were about falling housing prices, rising default and foreclosure rates, failure of large investment banks, […]

287 Special Topic 6 Lessons from the Great Depression OUTLINE I. The Economic Record of the Great Depression A. Large reductions in output 1. Real GDP plunged during 1929-1933 2. After a modest recovery during 1934-1936, real GDP fell again […]

303 Special Topic 10 Do Labor Unions Increase the Wages of Workers? OUTLINE I. Union Membership as a Share of the Workforce A. Union Membership Trend 1. Since the mid-1950s, union membership has declined. 2. It declined slowly as a […]

307 Special Topic 11 The Question of Resource Exhaustion OUTLINE I. Doomsday Forecasts A. Forecasts that the world will soon run out of various key resources have been made for centuries. 1. These forecasts have consistently been wrong. II. Why […]

311 Special Topic 12 Difficult Environmental Cases and the Role of Government OUTLINE I. Government Regulation and the Environment A. When it is difficult to assign and enforce private property rights, markets often results in outcomes that are inefficient. 1. […]

291 Special Topic 7 The Federal Budget and National Debt OUTLINE I. Deficits, Surpluses, and the National Debt A. The national debt (the sum of the outstanding bonds of the U.S. Treasury) is increased by budget deficits and reduced by […]

295 Special Topic 8 The Economics of Health Care OUTLINE I. Structure of the Health Care Industry A. Spending on health care has soared in recent decades. 1. Measured as a share of the economy, total health care spending has […]

301 Special Topic 9 Earnings Differences Between Men and Women OUTLINE I. Employment Discrimination and Earnings of Women A. Besides employment discrimination, differences in specialization within the family, educational choices, and career goals contribute to the gender earnings gap. II. […]