preface1 introductionpart �� theory of the consumer2 preferences and utility��2.1 introduction��2.2 the consumer's preference relation��2.3 the marginal rate of substitution��2.4 the consumer's utility function��2.5 utility functions and the marginal rate of substitution��2.6 a solved problem��exercises appendix. differentiation of functions3 the budget constraint and the consumer's optimal choice��3.1 introduction��3.2 the standard budget constraint, the budget set, and the budget line��3.3 shifts of the budget line��3.4 odd budget constraints��3.5 income and consumption over time��3.6 the consumer's optimal choice: graphical analysis��3.7 the consumer's optimal choice: utility maximization subject to the budget constraint��3.8 two solved problems��exercises��appendix. maximization subject to a constraint: the lagrange function method4 demand functions��4.1 introduction��4.2 demand as a function of income��4.3 demand as a function of price��4.4 demand as a function of price of the other good��4.5 substitution and income effects��4.6 the compensated demand curve��4.7 elasticity��4.8 the market demand curve��4.9 a solved problem��exercises5 supply functions for labor and savings��5.1 introduction to the supply of labor��5.2 choice between consumption and leisure��5.3 substitution and income effects in labor supply��5.4 other types of budget constraints��5.5 taxing the consumer's wages��5.6 saving and borrowing: the intertemporal choice of consumption��5.7 the supply of savings��5.8 a solved problem��exercises6 welfare economics 1: the one-person case��6.1 introduction��6.2 welfare comparison of a per-unit tax and an equivalent lump-sum tax��6.3 rebating a per-unit tax��6.4 measuring a change in welfare for one person��6.5 measuring welfare for many people; a preliminary example��6.6 a solved problem��exercises appendix. revealed preference7 welfare economics 2: the many-person case��7.1 introduction��7.2 quasilinear preferences��7.3 consumer's surplus��7.4 a consumer's surplus example with quasilinear preferences��7.5 consumers' surplus��7.6 a last word on the quasilinearity assumption��7.7 a solved problem��exercisespart �� theory of the producer8 theory of the firm 1: the single-input model��8.1 introduction��8.2 the competitive firm's problem, focusing on its output��8.3 the competitive firm's problem, focusing on its input��8.4 multiple outputs��8.5 a solved problem��exercises9 theory of the firm 2: the long-run, multiple-input model��9.1 introduction��9.2 the production function in the long run��9.3 cost minimization in the long run��9.4 profit maximization in the long run��9.5 a solved problem��exercises10 theory of the firm 3: the short-run, multiple-input model��10.1 introduction��10.2 the production function in the short run��10.3 cost minimization in the short run��10.4 profit maximization in the short run��10.5 a solved problem��exercisespart �� partial equilibrium analysis: market structure11 perfectly competitive markets��11.1 introduction��11.2 perfect competition��11.3 market/industry supply��11.4 equilibrium in a competitive market��11.5 competitive equilibrium and social surplus maximization��11.6 the deadweight loss of a per-unit tax��11.7 a solved problem��exercises12 monopoly and monopolistic competition��12.1 introduction��12.2 the classical solution to monopoly��12.3 deadweight loss from monopoly: comparing monopoly and competition��12.4 price discrimination��12.5 monopolistic competition��12.6 a solved problem��exercises13 duopoly��13.1 introduction��13.2 cournot competition��13.3 more on dynamics��13.4 collusion��13.5 stackelberg competition��13.6 bertrand competition��13.7 a solved problem��exercises14 game theory��14.1 introduction��14.2 the prisoners' dilemma, and the idea of dominant strategy equilibrium��14.3 prisoners' dilemma complications: experimental evidence and repeated games��14.4 the battle of the sexes, and the idea of nash equilibrium��14.5 battle of the sexes complications: multiple or no nash equilibria, and mixed strategies��14.6 the expanded battle of the sexes, when more choices make players worse off��14.7 sequential move games��14.8 threats��14.9 a solved problem��exercisespart iv general equilibrium analysis15 an exchange economy��15.1 introduction��15.2 an economy with two consumers and two goods��15.3 pareto efficiency��15.4 competitive or walrasian equilibrium��15.5 the two fundamental theorems of welfare economics��15.6 a solved problem��exercises16 a production economy��16.1 introduction��16.2 a robinson crusoe production economy��16.3 pareto efficiency��16.4 walrasian or competitive equilibrium��16.5 when there are two goods, bread and rum��16.6 the two welfare theorems revisited��16.7 a solved problem��exercisespart v market failure17 externalities��17.1 introduction��17.2 examples of externalities��17.3 the oil refiner and the fish farm��17.4 classical solutions to the externality problem: pigou and coase��17.5 modern solutions for the externality problem: markets��for pollution rights��17.6 modern solutions for the externality problem: cap and trade��17.7 a solved problem��exercises18 public goods��18.1 introduction��18.2 examples of public goods��18.3 a simple model of an economy with a public good��18.4 the samuelson optimality condition��18.5 the free rider problem and voluntary contribution��mechanisms��18.6 how to get efficiency in economies with public goods��18.7 a solved problem��exercises19 uncertainty and expected utility��19.1 introduction and examples��19.2 von neumann-morgenstern expected utility: preliminaries��19.3 von neumann-morgenstern expected utility:��assumptions and conclusion��19.4 von neumann-morgenstern expected utility: examples��19.5 a solved problem��exercises20 uncertainty and asymmetric information��20.1 introduction��20.2 when sellers know more than buyers: the market for "lemons"��20.3 when buyers know more than sellers: a market for health insurance��20.4 when insurance encourages risk taking: moral hazard��20.5 the principal-agent problem��20.6 what should be done about market failures caused by asymmetric information��20.7 a solved problem��exercisesindex