Essentials of economics hubbard pdf download

No other text that we know of uses the experiences of modern students to reinforce new terminology with examples from everyday life in everyday language. While they may not know it, students are key participants in the economy and their experiences should be the platform from which our instruction begins. So, ultimately, we wanted to develop a textbook that would engage students, one that is enjoyable to read week in and week out, a concise presentation of the discipline that encourages students to think about how economics affects their lives.

We hope that Essentials of Economics will be your partner in success in helping your students live more fulfilled and satisfying lives. What does this classroom-inspired, student-centered text look like?

Do you like this book? Please share with your friends, let's read it!! Search Ebook here:. Book Preface We are teachers of economics. Taylor, N. Complete economics coverage shows students how economics is relevant to their lives NEW and UPDATED - Examples and policy discussions detail developments in US and world economies, including the longest economic expansion in the history of the US economy, the first significant international trade war since the s, and record peacetime federal budget deficits -- helping students become educated consumers, voters, and citizens.

Student-focused features enhance understanding of key economic topics NEW - An Inside Look boxes in chapters 1 - 3 use news articles to teach students how to apply economic thinking to current events and policy debates. An excerpt of the article, step-by-step analysis, corresponding graph or table, and Thinking Critically exercise are provided. Additional articles are routinely posted to MyLab Economics. Each Apply the Concept has a related question in the end-of-chapter Problems and Applications section.

Students can then visit MyLab Economics to watch a brief video by author Glenn Hubbard that summarizes the key points of each. This is followed up with a related question in the end-of-chapter Problems and Applications section. UPDATED - Figures, tables, and their animations provide clear insights into economic issues, and have been updated so students are working with the latest data available. Louis , learn how to locate data and develop skills in interpreting data.

A widget-free approach and modern organization give students a solid foundation in economics Microeconomics: A strong set of introductory chapters 1 - 3 provide students with a solid foundation in the basics, including marginal analysis and economic efficiency. Early coverage of policy issues helps clarify ideas encountered in later chapters.

Complete coverage of monopolistic competition and oligopoly in chapter 11 discusses topics such as brand management and sources of competitive success. Extensive, realistic game theory coverage in chapter 11 analyzes competition among oligopolists including Apple, Amazon, Dell, Spotify, and Walmart , helping students to understand how companies with market power make strategic decisions in many competitive situations.

Macroeconomics: A broad discussion of macro statistics in chapters 18 and 19 helps clarify some of the policy issues encountered in later chapters, including important differences between the payroll survey and household survey for understanding conditions in the labor market; and the employment-population ratio, which is not covered in some other books but which many economists regard as a key measure of labor market performance.

Early coverage of long-run topics in chapters 13 and 14 helps prepare students to understand business cycles to interpret economic events.

The text distinguishes between automatic stabilizers and discretionary fiscal policy, and also provides significant coverage of the supply-side effects of fiscal policy. While 2 chapters are devoted to monetary policy, the first of these chapter 16 is a self-contained discussion, so instructors may safely omit the material in chapter 17 if they so choose.

UPDATED - International material in chapter 19 gives students a good understanding of international trading and financial systems -- essential to understanding the macroeconomy and satisfying their curiosity about the economic world around them. End-of-chapter material, including summaries, review questions, and problems and applications, is grouped together under learning objectives to make it easier for instructors to assign problems based on learning objectives and to help students efficiently review material that they find difficult.

Reach every student with MyLab Teach your course your way: Your course is unique. Empower each learner: Each student learns at a different pace. Personalized learning pinpoints the precise areas where each student needs practice, giving all students the support they need -- when and where they need it -- to be successful.

These animated graphs help students understand shifts in curves, movements along curves, and changes in equilibrium values.

UPDATED - Digital Interactives are dynamic and engaging assessment activities that promote critical thinking and the application of key economic principles. Many Digital Interactives also include real-time data from FRED, allowing professors and students to display up-to-the-minute data in key areas. Digital Interactives can be assigned and graded within MyLab Economics, or used as a lecture tool to encourage engagement and classroom conversation. Deliver trusted content: You deserve teaching materials that meet your own high standards for your course.

Improve student results: When you teach with MyLab, student performance often improves. Check out the preface for a complete list of features and what's new in this edition. New to This Edition. Complete economics coverage shows students how economics is relevant to their lives Examples and policy discussions detail developments in US and world economies, including the longest economic expansion in the history of the US economy, the first significant international trade war since the s, and record peacetime federal budget deficits -- helping students become educated consumers, voters, and citizens.

End-of-chapter Questions, Problems, and Critical Thinking Exercises help students build skills to analyze and interpret information and apply reasoning and logic to new or unfamiliar ideas and situations. Student-focused features enhance understanding of key economic topics An Inside Look boxes in chapters 1 - 3 use news articles to teach students how to apply economic thinking to current events and policy debates.

Apply the Concepts features reinforce key concepts and help students interpret what they read in the news. Solved Problems show students how to solve an economic problem by breaking it down step by step. A widget-free approach and modern organization give students a solid foundation in economics Macroeconomics: Coverage of both the demand-side and supply-side effects of fiscal policy is included in chapter About 54 percent of the population has private health insurance, often provided by an employer.

When the fees doctors charge, the cost of prescription drugs, and the cost of hospital stays rise, the cost to employers of providing health insurance increases. Some employers— particularly small firms—will even stop offering health insurance to their employees. In either case, the price employees pay for health care will rise.

How do people respond to rising health care costs? In fact, studies have shown that rising health care costs cause people to cut back their spending on medical services, just as people cut back their spending on other goods and services when their prices rise. One academic study indicates that for every 1 percent increase in the amount employers charge employees for insurance, , people become uninsured. Of course, people without health insurance can still visit the doctor and obtain prescriptions, but they have to pay higher prices than do people with insurance.

Although the consequences of being uninsured can be severe, particularly if someone develops a serious illness, economists are not surprised that higher prices for health insurance lead to less health insurance being purchased: Faced with limited incomes, people have to make choices among the goods and services they buy.

The Congressional Budget Office estimates that as the U. Many policymakers are concerned that this rapid increase in Medicare spending will force a reduction in spending on other government programs. Daniel Callahan, a researcher at the Hastings Center for Bioethics, has argued that policymakers should consider taking some dramatic steps, such as having Medicare stop paying for open-heart surgery and other expensive treatments for people over 80 years of age.

Spending less on prolonging the lives of the very old in order to save resources that can be used for other purposes is a very painful trade-off to consider.

But in a world of scarcity, trade-offs of some kind are inevitable. Suppose the U. He asks you, one of his economic advisors, to prepare a report discussing the relevant factors he should consider. Use the concepts of opportunity cost and trade-offs to discuss some of the main issues you would deal with in your report. Solution: If the federal government has a fixed budget for medical research, then the opportunity cost of funding more research on heart disease is the reduction in funding for research on other diseases.

The decision should be made at the margin: to maximize the benefits from government spending on medical research, the last dollar devoted to research on heart disease should result in the same marginal benefit—less disease and fewer deaths—as the last dollar spent on research for other diseases.

If the additional funding for research on heart disease comes at the expense of other non-medical research expenditures, then the opportunity cost will be different, but a similar analysis should be conducted.

Uwe Reinhardt, an economist at Princeton University, wrote the following in a column in the New York Times: [Cost-effectiveness analysis] seeks to establish which of several alternative strategies capable of achieving a given therapeutic goal is the least-cost strategy.

It seems a sensible form of inquiry in a nation that is dismayed over the rising cost of health care. Are there any decisions you make during your everyday life that indicate whether you consider health and life to be priceless?

Source: Uwe E. Solution: Nothing is priceless. Every day we makes decisions, such as driving a car or flying in a plane, that increase by at least a small amount the chances that we will be hurt or killed.

If health and life were literally priceless, every decision we make would have the sole objective of minimizing the chances of our being injured or killed. In a broader sense, we do not devote all of our resources to improving health care because resources devoted to, say, saving lives through medical research are not available for other needs, such as improving education.

We always have to consider the opportunity cost of using resources in one way rather than in another. Trade is the act of buying and selling. Trade makes it possible for people to become better off by increasing both their production and their consumption. Specialization and Gains from Trade PPFs depict the combinations of two goods that can be produced if no trade occurs.

We can use PPFs to show how someone can benefit from trade even if she is better than someone else at producing both goods. Absolute Advantage versus Comparative Advantage Absolute advantage is the ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources.

If the two individuals have different opportunity costs for producing two goods, each individual will have a comparative advantage in the production of one of the goods. Comparative advantage is the ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors.

Comparing the possible combinations of production and consumption before and after specialization and trade occur proves that trade is mutually beneficial.

Comparative Advantage and the Gains from Trade The basis for trade is comparative advantage, not absolute advantage. Individuals, firms, and countries are better off if they specialize in producing the goods and services for which they have a comparative advantage and obtain the other goods and services they need by trading.

Teaching Tips Even good students have difficulty understanding comparative advantage. A good example of comparative advantage is the career of baseball legend Babe Ruth. Before he achieved his greatest fame as a home run hitter and outfielder with the New York Yankees, Ruth was a star pitcher with the Boston Red Sox.

Ruth may have been the best left-handed pitcher in the American League during his years with Boston — , but he was used more as an outfielder in his last two years with the team. In fact, he established a record for home runs in a season 29 in The Yankees acquired Ruth in and made him a full-time outfielder. The opportunity cost of this decision for the Yankees was the wins he could have earned as a pitcher. But because New York already had skilled pitchers, the opportunity cost of replacing him as a pitcher was lower than the cost of replacing Ruth as a hitter.

It can be argued that Ruth had an absolute advantage as both a hitter and pitcher for the Yankees in , but a comparative advantage only as a hitter. In the United States and most other countries, trade is carried out in markets. A market is a group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade.

A product market is a market for goods—such as computers—or services—such as medical treatment. A factor market is a market for the factors of production, such as labor, capital, natural resources, and entrepreneurial ability.

Factors of production are the labor, capital, natural resources, and other inputs used to make goods and services. The Circular Flow of Income A circular-flow diagram is a model that illustrates how participants in markets are linked. The diagram demonstrates the interaction between firms and households in both product and factor markets.

The Gains from Free Markets A free market is a market with few government restrictions on how a good or service can be produced or sold or on how a factor of production can be employed.

Adam Smith is considered the father of modern economics. His book, An Inquiry into the Nature and Causes of the Wealth of Nations, published in , was an influential argument for the free market system. This assumption underlies nearly all economic analysis. The Role of the Entrepreneur in the Market System Entrepreneurs are an essential part of a market economy.

An entrepreneur is someone who operates a business, bringing together the factors of production—labor, capital, and natural resources—to produce goods and services. Entrepreneurs often risk their own funds to start businesses and organize factors of production to produce those goods and services that consumers want. The Legal Basis of a Successful Market System The absence of government intervention is not enough for a market economy to work well. Government has to provide a legal environment that allows markets to operate efficiently.

Property rights are the rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it. To protect intellectual property rights, the federal government grants a patent that gives an inventor — often a firm—the exclusive right to produce and sell a new product for 20 years from the date the patent was filed.

Books, films, and software receive copyright protection. Under U. Business activity often involves someone agreeing to carry out some action in the future. These agreements often take the form of legal contracts. For the market system to work, businesses and individuals have to rely on these contracts being carried out. Enforcing contracts or property rights requires an independent court system and judges who are able to make impartial decisions on the basis of the law.

If property rights are not well enforced fewer goods and services will be produced, leaving the economy inside its production possibilities frontier. Teaching Tips To initiate class discussion regarding intellectual property rights, ask students these questions: 1. How many of you have downloaded music via the Internet?

Should the government have the right to grant exclusive rights to musicians and other artists to produce and sell their creative works?

Should the government fine or prosecute individuals who illegally obtain music, books, movies, and other creative works in violation of property rights laws? What types of regulation and privilege might merchants and manufacturers seek from the government?

How might these regulations and privileges keep the invisible hand from working? Solving the Problem Step 1: Review the chapter material. This problem is about how goods and services are produced and sold and how factors of production are employed in a free market economic system as described by Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations. Step 2: Answer part a. At the time, governments gave guilds—associations of producers—the authority to control production.

The production controls limited the output of goods such as shoes and clothing, as well as the number of producers of these items. Limiting production and competition led to higher prices and fewer choices for consumers. Instead of catering to the wants of consumers, producers sought favors from government officials.

Step 3: Answer part b. Under a market system, producers who sell poor quality goods at high prices suffer economic losses; producers who provide better quality goods at low prices are rewarded with profits. Therefore, it is in the self-interest of producers to address consumer wants. This is how the invisible hand works in a free market economy, but not in most of Europe in the eighteenth century.

But most economists believe that free trade policies, including allowing goods and services to be produced in other countries, benefit domestic economies. In a letter dated March 5th , 14 economists including R. Questions: a Should the United States accept the advice of economists and support free trade policies even if this increases the risk of some workers losing their jobs to outsourcing?

Answers: a Given the opposition from firms and workers in industries that would be harmed by free trade, it is unlikely that the United States would eliminate all trade barriers. But studies such as the one cited by Ben Bernanke show that increased trade can significantly boost the incomes of U.

In , maximum production is , two-door convertibles or , four-door sedans, so to gain one four-door sedan, Apple must give up producing one two-door convertible.

In , maximum production is , two-door convertibles or , four-door sedans, so to gain one four-door sedan, Apple must give up producing 1. The production point representing , four-door sedans and 65, two-door convertibles lies outside the PPF, and is therefore an unattainable production point.

The PPF represents maximum production, and according to the figure, the maximum number of total vehicles that can be produced in is , If Apple filled the , four-door sedan orders, it would only be able to produce 40, two-door convertibles. If Apple filled the 65, two-door convertible orders, it would only be able to produce 85, four-door sedans. Review Questions 1. There are some things that are available in such abundance that they exceed our wants. Another example might be something undesirable, such as weeds in your garden—unlike tomato plants, the number of weeds available exceeds the number you desire.

Combinations of goods that are on the frontier are efficient because all available resources are being fully used, and the fewest possible resources are being used to produce a given amount of output. Points inside the production possibilities frontier are inefficient because the maximum output is not being obtained from the available resources. A production possibilities frontier will shift outward to the right if more resources become available for making the products or if technology improves so that firms can produce more output with the same amount of inputs.

It occurs because the first units of a good are produced with the resources that are best suited for making it, but as more and more of the good is produced, resources must be used that are better suited for producing something else.

Increasing marginal opportunity costs imply that the production possibilities frontier PPF is bowed out—that the slope of the PPF gets steeper and steeper as you move down it.

Problems and Applications 1. The production possibilities frontiers in the figure are bowed to the right from the origin because of increasing marginal opportunity costs. The drought causes the production possibilities frontier to shift to the left see graph below in part b. The genetic modifications would shift to the right the maximum soybean production doubling it , but not the maximum cotton production.

Trade-offs can be between physical goods, such as cotton and soybeans in problem 1. The time spent reading a book always has an opportunity cost. The production possibilities frontier will be bowed out like Figure 2. Because it will have more machinery and equipment, Luxembourg is likely to experience more rapid growth in the future.