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file:///E|/toc/Mankiw%20-%20Principles%20of%20Economics%203e%20-%20TOC.txt

Part One:
Introduction
1. Ten Principles of Economics
2. Thinking Like an Economist Appendix: Graphing: A Brief Review
3. Interdependence and the Gains from Trade
Part Two: Supply and Demand I: How Markets Work
4. The Market Forces of Supply and Demand
5. Elasticity and Its Application
6. Supply, Demand, andGovernment Policies
Part Three: Supply and Demand II: Markets and Welfare
7. Consumers, Producers, and the Efficiency of Markets
8. Application: The Costs of Taxation
9. Application: International Trade
Part Four: The Economics of Public Sector
10. Externalities
11. Public Goods and Common Resources
12. The Design of the Tax System
Part Five: Firm Behavior and the Organization of Industry13. The Costs of Production
14. Firms in Competitive Markets
15. Monopoly
16. Oligopoly
17. Monopolistic Competition
Part Six: The Economics of Labor Markets
18. The Markets for the Factors of Production
19. Earnings and Discrimination
20. Income Inequality and Poverty
Part Seven: Topics for Further Study
21. The Theory of Consumer Choice
Part Eight: The Data of Macroeconomics
22.Measuring a Nation''s Income
23. Measuring the Cost of Living
Part Nine: The Real Economy in the Long Run
24. Production and Growth
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file:///E|/toc/Mankiw%20-%20Principles%20of%20Economics%203e%20-%20TOC.txt

25. Saving, Investment, and the Financial System
26. Unemployment and Its NaturalRate
Part Ten: Money and Prices in the Long Run
27. The Monetary System
28. Money Growth and Inflation
Part Eleven: The Macroeconomics of Open Economies
29. Open-Economy Macroeconomics: Basic Concepts
30. A Macroeconomic Theory of the Open Economy
Part Twelve: Short-Run Economic Fluctuations
31. Aggregate Demand and Aggregate Supply
32. The Influence of Monetary and Fiscal Policy onAggregate Demand
33. The Short-Run Tradeoff between Inflation and Unemployment
Part Thirteen: Final Thoughts
34. Five Debates over Macroeconomic Policy

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IN THIS CHAPTER
YOU WILL . . .

Learn that
economics is about
the allocation of
scarce resources

Examine some of the
tradeof fsthat people
face

Learn the meaning of
oppor tunity cost

See how to use
marginal reasoning
when making
decisions

TEN
OF

PRINCIPLES

Discuss how
incentives af fect
people’s behavior

ECONOMICS

The word economy comes from the Greek word for “one who manages a household.” At first, this origin might seem peculiar. But, in fact, households and
economies have much in common.A household faces many decisions. It must decide which members of the
household do which tasks and what each member gets in return: Who cooks dinner? Who does the laundry? Who gets the extra dessert at dinner? Who gets to
choose what TV show to watch? In short, the household must allocate its scarce resources among its various members, taking into account each member’s abilities,
efforts, anddesires.
Like a household, a society faces many decisions. A society must decide what
jobs will be done and who will do them. It needs some people to grow food, other
people to make clothing, and still others to design computer software. Once society has allocated people (as well as land, buildings, and machines) to various jobs,
3

Consider why trade
among people or
nations can be goodfor everyone

Discuss why markets
are a good, but not
per fect, way to
allocate resources

Learn what
determines some
trends in the overall
economy

4

PA R T O N E

INTRODUCTION

scarcity
the limited nature of society’s
resources
economics
the study of how society manages its
scarce resources

it must also allocate the output of goods and services that they produce. It...
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