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Basic Economics: A Common Sense Guide to the Economy, Fourth Edition

Book Description

The fourth edition of Basic Economics is both expanded and updated. A new chapter on the history of economics itself has been added, and the implications of that history examined. A new section on the special role of corporations in the economy has been added to the chapter on government and big business, among other additions throughout the book.

Basic Economics, which has now been translated into six languages, has grown so much that a large amount of material in the back of the book in previous editions has now been put online instead, so the book itself and its price will not have to expand. The central idea of Basic Economics, however, remains the same: that the fundamental facts and principles of economics do not require jargon, graphs, or equations, and can be learned in a relaxed and even enjoyable way.

Table of Contents

  1. Title Page
  2. Dedication
  3. Preface
  4. Acknowledgements
  5. Chapter 1 - WHAT IS ECONOMICS?
  6. PART I: - PRICES AND MARKETS
    1. Chapter 2 - THE ROLE OF PRICES
      1. PRICES AND COSTS
      2. SUPPLY, DEMAND AND “NEED”
    2. Chapter 3 - PRICE CONTROLS
      1. PRICE CEILINGS AND SHORTAGES
      2. PRICE FLOORS AND SURPLUSES
      3. THE POLITICS OF PRICE CONTROLS
    3. Chapter 4 - AN OVERVIEW
      1. CAUSE AND EFFECT
      2. INCENTIVES VERSUS GOALS
      3. SCARCITY AND COMPETITION
  7. PART II: - INDUSTRY AND COMMERCE
    1. Chapter 5 - THE RISE AND FALL OF BUSINESSES
      1. ADJUSTING TO CHANGES
      2. THE COORDINATION OF KNOWLEDGE
    2. Chapter 6 - THE ROLE OF PROFITS — AND LOSSES
      1. PROFITS
      2. COSTS OF PRODUCTION
      3. SPECIALIZATION AND DISTRIBUTION
    3. Chapter 7 - BIG BUSINESS AND GOVERNMENT
      1. CORPORATIONS
      2. MONOPOLIES AND CARTELS
      3. REGULATORY COMMISSIONS
      4. ANTI-TRUST LAWS
    4. Chapter 8 - AN OVERVIEW
      1. KNOWLEDGE AND DECISIONS
      2. MARKET AND NON-MARKET ACTIONS
      3. WINNERS AND LOSERS
  8. PART III: WORK AND PAY
    1. Chapter 9 - PRODUCTIVITY AND PAY
      1. PRODUCTIVITY
      2. PAY DIFFERENCES
      3. CAPITAL, LABOR, AND EFFICIENCY
    2. Chapter 10 - CONTROLLED LABOR MARKETS
      1. JOB SECURITY
      2. MINIMUM WAGE LAWS
      3. COLLECTIVE BARGAINING
      4. WORKING CONDITIONS
    3. Chapter 11 - AN OVERVIEW
      1. ALLOCATION AND INEQUALITIES
      2. THE MYSTIQUE OF “LABOR”
  9. PART IV: TIME AND RISK
    1. Chapter 12 - INVESTMENT AND SPECULATION
      1. INVESTMENTS
      2. SPECULATION
      3. INVENTORIES
      4. RETURN ON INVESTMENT
      5. PRESENT VALUE
    2. Chapter 13 - RISKS AND INSURANCE
      1. BONDS
      2. VARIABLE RETURNS VERSUS FIXED RETURNS
      3. INSURANCE
    3. Chapter 14 - AN OVERVIEW
      1. TIME AND MONEY
      2. ECONOMIC ADJUSTMENTS
  10. PART V: THE NATIONAL ECONOMY
    1. Chapter 15 - NATIONAL OUTPUT
      1. THE FALLACY OF COMPOSITION
      2. OUTPUT AND DEMAND
      3. MEASURING NATIONAL OUTPUT
    2. Chapter 16 - MONEY AND THE BANKING SYSTEM
      1. THE ROLE OF MONEY
      2. THE BANKING SYSTEM
      3. FOREIGN BANKING SYSTEMS
    3. Chapter 17 - GOVERNMENT FUNCTIONS
      1. LAW AND ORDER
      2. EXTERNAL COSTS AND BENEFITS
      3. INCENTIVES AND CONSTRAINTS
    4. Chapter 18 - GOVERNMENT FINANCE
      1. TAXATION
      2. GOVERNMENT BONDS
      3. CHARGES FOR GOODS AND SERVICES
      4. GOVERNMENT EXPENDITURES
      5. GOVERNMENT OBLIGATIONS
    5. Chapter 19 - AN OVERVIEW
      1. THE ROLE OF GOVERNMENT
      2. ZERO-SUM THINKING
      3. THE FALLACY OF COMPOSITION
      4. MARKET FAILURE AND GOVERNMENT FAILURE
  11. PART VI: - THE INTERNATIONAL ECONOMY
    1. Chapter 20 - INTERNATIONAL TRADE
      1. THE BASIS FOR INTERNATIONAL TRADE
      2. INTERNATIONAL TRADE RESTRICTIONS
      3. CHANGING CONDITIONS
    2. Chapter 21 - INTERNATIONAL TRANSFERS OF WEALTH
      1. INTERNATIONAL INVESTMENTS
      2. OTHER TRANSFERS
      3. THE INTERNATIONAL MONETARY SYSTEM
    3. Chapter 22 - AN OVERVIEW
      1. THE ROLE OF TRADE
      2. THE ROLE OF INTERNATIONAL INVESTMENT
  12. PART VII: - SPECIAL ECONOMIC ISSUES
    1. Chapter 23 - MYTHS ABOUT MARKETS
      1. PRICES
      2. BRAND NAMES
      3. THE ROLE OF PROFITS
      4. “TRICKLE DOWN” THEORY
    2. Chapter 24 - “NON-ECONOMIC” VALUES
      1. MARKETS AND VALUES
      2. SAVING LIVES
      3. “UNMET NEEDS”
    3. Chapter 25 - THE HISTORY OF ECONOMICS
      1. THE MERCANTILISTS
      2. CLASSICAL ECONOMICS
      3. MODERN ECONOMICS
      4. THE ROLE OF ECONOMICS
    4. Chapter 26 - PARTING THOUGHTS
  13. QUESTIONS
  14. SOURCES
  15. INDEX
  16. Copyright Page