Principles of Economics, Global Edition

About our authors Karl E. Case, who passed away in July 2016, was a Professor of Economics Emeritus at Wellesley College, where he taught for 34 years, serving several tours of duty as Department Chair. He was a Senior Fellow at the Joint Center for Housing Studies at Harvard University and a founding partner in the real estate research firm of Fiserv Case Shiller Weiss, which produces the S&P Case-Shiller Index of home prices. He served as a member of the Index Advisory Committee of Standard and Poor’s, and on the Academic Advisory Board of the Federal Reserve Bank of Boston.Professor Case received his BA from Miami University in 1968, spent three years on active duty in the Army and received his PhD in Economics from Harvard University in 1976.Professor Case’s research was in the areas of real estate, housing and public finance. He authored or coauthored five books, including Principles of Economics, Economics and Tax Policy and Property Taxation: The Need for Reform, and published numerous articles in professional journals, focused on real estate markets and prices.Chip, as he was known to his many friends and colleagues, contributed to this textbook throughout its many editions. In his honor and with respect for his substantial contributions to the text and the discipline of economics, his coauthors plan to keep his name on the text for all future editions.Ray C. Fair is Professor of Economics at Yale University. He is a member of the Cowles Foundation at Yale and a Fellow of the Econometric Society. He received a BA in Economics from Fresno State College in 1964 and a PhD in Economics from MIT in 1968. He taught at Princeton University from 1968 to 1974. Professor Fair has taught introductory and intermediate macroeconomics at Yale since 1974. He has also taught graduate courses in macroeconomic theory and macroeconometrics.Professor Fair’s research has primarily been in the areas of macroeconomics and econometrics, with particular emphasis on macroeconometric model building. He has also done work in the areas of finance, voting behavior and aging in sports. His publications include Macroeconomic Modeling: The Cowles Commission Approach (M.I.T. Press, 2024) and Predicting Presidential Elections and Other Things (Stanford University Press, 2012).Professor Fair’s US and multicountry models are available for use on the Internet free of charge. Many teachers have found that having students work with the US model on the Internet is a useful complement to an introductory macroeconomics course.Sharon M. Oster, who passed away in June 2022, was the Frederic Wolfe Professor of Economics and Management and former Dean of the Yale School of Management. Professor Oster joined Case and Fair as a coauthor in the ninth edition of this book. Professor Oster had a BA in Economics from Hofstra University and a PhD in Economics from Harvard University.Professor Oster’s research focused on industrial organization. She worked on problems of diffusion of innovation in a number of different industries, on the effect of regulations on business and on competitive strategy. She published a number of articles in these areas and was the author of several books, including Modern Competitive Analysis and The Strategic Management of Nonprofits.Prior to joining the School of Management at Yale, Professor Oster taught for a number of years in Yale’s Department of Economics. In the department, Professor Oster taught introductory and intermediate microeconomics to undergraduates as well as several graduate courses in industrial organization. Beginning in 1982, Professor Oster taught primarily in the Management School, where she taught the core microeconomics class for MBA students and a course in the area of competitive strategy. Professor Oster also consulted widely for businesses and nonprofit organizations and served on the boards of several publicly traded companies and nonprofit organizations.

• PART 1: INTRODUCTION TO ECONOMICS The Scope and Method of EconomicsThe Economic Problem: Scarcity and ChoiceDemand, Supply, and Market EquilibriumDemand and Supply ApplicationsElasticityPART 2: THE MARKET SYSTEM Household Behavior and Consumer ChoiceThe Production Process: The Behavior of Profit-Maximizing FirmsShort-Run Costs and Output DecisionsLong-Run Costs and Output DecisionsInput Demand: The Labor and Land MarketsInput Demand: The Capital Market and the Investment DecisionGeneral Equilibrium and the Efficiency of Perfect CompetitionPART 3: MARKET IMPERFECTIONS AND THE ROLE OF GOVERNMENT Monopoly and Antitrust PolicyOligopolyMonopolistic CompetitionExternalities, Public Goods, and Common ResourcesUncertainty and Asymmetric InformationIncome Distribution and PovertyPublic Finance: The Economics of TaxationPART 4: CONCEPTS AND PROBLEMS IN MACROECONOMICS Introduction to MacroeconomicsMeasuring National Output and National IncomeUnemployment, Inflation, and Long-Run GrowthPART 5: THE CORE OF MACROECONOMIC THEORY Aggregate Expenditure and Equilibrium OutputThe Government and Fiscal PolicyMoney, the Federal Reserve, and the Interest RateThe Determination of Aggregate Output, the Price Level, and the Interest RatePolicy Effects and Cost Shocks in the AS/AD ModelThe Labor Market in the MacroeconomyPART 6: FURTHER MACROECONOMICS ISSUES Financial Crises, Stabilization, and DeficitsHousehold and Firm Behavior in the Macroeconomy: A Further LookLong-Run GrowthAlternative Views in MacroeconomicsPART 7: THE WORLD ECONOMY International Trade, Comparative Advantage, and ProtectionismOpen-Economy Macroeconomics: The Balance of Payments and Exchange RatesEconomic Growth in Developing EconomiesPART 8: METHODOLOGY Critical Thinking about Research