Dear Instructors - Cengage

Dear Instructors:

Since its inception, William Baumol and Alan Blinder's Economics: Principles and Policy has been the choice of instructors who, where appropriate, want to teach introductory concepts in the context of real world policy. At no time since the first edition has this approach been more relevant and important. In fact, the recent economic crisis has been called the "teachable moment of the century."

Because data is so vital to an exploration of economics through policy, having a text that is as current as possible is a must. A number of editions ago, instructors asked us if we could provide a mid-edition update and we are pleased to announce the newest updated edition.

In June, we will be publishing Economics: Principles and Policy, Update 2010 Edition, 11e

This quick online preview gives you a glimpse of what this exciting update has to offer. You will see that the economic data is updated through early spring 2010.

In addition, an all-new Chapter 37, The Financial Crisis and the Great Recession, focuses on the financial crisis of 2007-2009, telling the story of the subprime crisis, the broader financial panic, the ensuing Great Recession, and some of the steps the U.S. government has taken to fight the crisis.

The Update also includes expanded coverage of developing economies in China and India, outsourcing, the impact of human capital on economic growth, consumer choice, and much more.

This will not only be the most up to date text in print, but every day you and your students will have access to the latest journal and news articles, podcasts, data and videos at no additional charge when you request that your text be bundled with The Global Economic Crisis Resource Center.

Contact your local Cengage Learning representative and tell them that you want Baumol and Blinder's updated edition packaged with the Global Economic Watch at no additional charge.

We hope you enjoy this preview of the updated edition.

Sincerely,

John Carey Sr. Marketing Manager, Economics

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ECONOMICS

Principles and Policy

Eleventh Edition 2010 Update William J. Baumol

New York University and Princeton University

Alan S. Blinder

Princeton University

Australia ? Brazil ? Japan ? Korea ? Mexico ? Singapore ? Spain ? United Kingdom ? United States

? Cengage Learning. All rights reserved. No distribution allowed without express authorization.

Economics: Principles and Policy, Eleventh Edition 2010 Update William J. Baumol, Alan S. Blinder

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Brief Contents

Preface xxvii About the Authors xxxi

PART 1

GETTING ACQUAINTED WITH ECONOMICS

Chapter 1 What Is Economics? 3 Chapter 2 The Economy: Myth and Reality 21 Chapter 3 The Fundamental Economic Problem: Scarcity and Choice 39 Chapter 4 Supply and Demand: An Initial Look 55

PART 2

THE BUILDING BLOCKS OF DEMAND AND SUPPLY

Chapter 5 Consumer Choice: Individual and Market Demand 83 Chapter 6 Demand and Elasticity 107 Chapter 7 Production, Inputs, and Cost: Building Blocks for Supply Analysis 127 Chapter 8 Output, Price, and Profit: The Importance of Marginal Analysis 155 Chapter 9 Investing in Business: Stocks and Bonds 177

PART 3

MARKETS AND THE PRICE SYSTEM

Chapter 10 The Firm and the Industry under Perfect Competition 197 Chapter 11 Monopoly 217 Chapter 12 Between Competition and Monopoly 235 Chapter 13 Limiting Market Power: Regulation and Antitrust 263

PART 4

THE VIRTUES AND LIMITATIONS OF MARKETS

Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18

The Case for Free Markets I: The Price System 287 The Shortcomings of Free Markets 309 The Market's Prime Achievement: Innovation and Growth 333 Externalities, the Environment, and Natural Resources 355 Taxation and Resource Allocation 377

PART 5

THE DISTRIBUTION OF INCOME

Chapter 19 Pricing the Factors of Production 397 Chapter 20 Labor and Entrepreneurship: The Human Inputs 419 Chapter 21 Poverty, Inequality, and Discrimination 445

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Brief Contents

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PART 6

THE MACROECONOMY: AGGREGATE SUPPLY AND DEMAND

Chapter 22 Chapter 23 Chapter 24 Chapter 25 Chapter 26 Chapter 27

An Introduction to Macroeconomics 467 The Goals of Macroeconomic Policy 489 Economic Growth: Theory and Policy 517 Aggregate Demand and the Powerful Consumer 537 Demand-Side Equilibrium: Unemployment or Inflation? 559 Bringing in the Supply Side: Unemployment and Inflation? 583

PART 7

FISCAL AND MONETARY POLICY

Chapter 28 Managing Aggregate Demand: Fiscal Policy 605 Chapter 29 Money and the Banking System 625 Chapter 30 Managing Aggregate Demand: Monetary Policy 645 Chapter 31 The Debate over Monetary and Fiscal Policy 661 Chapter 32 Budget Deficits in the Short and Long Run 683 Chapter 33 The Trade-Off between Inflation and Unemployment 701

PART 8

THE UNITED STATES IN THE WORLD ECONOMY

Chapter 34 International Trade and Comparative Advantage 723 Chapter 35 The International Monetary System:Order or Disorder? 745 Chapter 36 Exchange Rates and the Macroeconomy 763

PART 9 POSTSCRIPT: THE FINANCIAL CRISIS OF 2007?2009 Chapter 37 The Financial Crisis and the Great Recession 779

| APPENDIX | Answers to Odd-Numbered Test Yourself Questions 795

Glossary 813

Index 825

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