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Book Details
Abstract
Now in its 10th edition, Economics by Sloman, Garratt & Guest is known and loved for its active learning, student-friendly approach and unrivalled lecturer and student support.
Retaining all the hall mark features of previous editions, it continues to provide a balanced, comprehensive and completely up-to-date introduction to the world of economics.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Front Cover | Front Cover | ||
| Half Title Page | i | ||
| Title Page | iii | ||
| Copyright Page | iv | ||
| About the Authors\r | v | ||
| Brief Contents\r | vii | ||
| Contents | ix | ||
| Preface\r | xv | ||
| Student Resources Flowchart | xxi | ||
| Lecturer Resources Flowchart | xxii | ||
| Acknowledgements | xxiii | ||
| Publisher’s Acknowledgements | xxiv | ||
| Part A Introduction | 1 | ||
| Why Economics is Good for You | 2 | ||
| What is economics? | 3 | ||
| Puzzles and stories | 4 | ||
| Applying the principles | 5 | ||
| 1 Economics and Economies | 6 | ||
| 1.1 What do economists study? | 7 | ||
| 1.2 Different economic systems | 18 | ||
| 1.3 The nature of economic reasoning | 27 | ||
| Boxes | 10 | ||
| 1.1 Looking at macroeconomic data | 10 | ||
| 1.2 The opportunity costs of studying | 13 | ||
| 1.3 Scarcity and abundance | 14 | ||
| 1.4 Command economies | 22 | ||
| 1.5 Adam Smith (1723–90) | 25 | ||
| 1.6 Ceteris paribus | 28 | ||
| Part B Foundations of Microeconomics | 33 | ||
| 2 Supply and Demand | 34 | ||
| 2.1 Demand | 35 | ||
| 2.2 Supply | 42 | ||
| 2.3 Price and output determination | 45 | ||
| 2.4 Elasticity | 56 | ||
| 2.5 The time dimension | 70 | ||
| Boxes | 40 | ||
| 2.1 The demand for lamb | 40 | ||
| 2.2 UK house prices | 50 | ||
| 2.3 Stock market prices | 54 | ||
| 2.4 Advertising and its effect on demand curves | 61 | ||
| 2.5 Any more fares? | 62 | ||
| 2.6 Using calculus to calculate the price elasticity of demand | 64 | ||
| 2.7 Short selling | 74 | ||
| 2.8 Dealing in futures markets | 75 | ||
| 3 Government and the Market | 79 | ||
| 3.1 The control of prices | 80 | ||
| 3.2 Indirect taxes and subsidies | 88 | ||
| 3.3 Government rejection of market allocation | 93 | ||
| 3.4 Agriculture and agricultural policy | 95 | ||
| Boxes | 83 | ||
| 3.1 A minimum unit price for alcohol | 83 | ||
| 3.2 The rise in illegal lending | 84 | ||
| 3.3 How can ticket touts make so much money? | 86 | ||
| 3.4 Ashes to ashes? | 90 | ||
| 3.5 The fallacy of composition | 97 | ||
| Part C MICROECONOMIC THEORY | 103 | ||
| 4 Background to Demand: the Rational Consumer | 104 | ||
| 4.1 Marginal utility theory | 105 | ||
| 4.2 The timing of costs and benefits | 113 | ||
| 4.3 Indifference analysis | 115 | ||
| Boxes | 107 | ||
| 4.1 Using calculus to derive a marginal utility function | 107 | ||
| 4.2 The marginal utility revolution: Jevons, Menger, Walras | 111 | ||
| 4.3 Taking account of time | 112 | ||
| 4.4 Love and caring | 120 | ||
| 4.5 Consumer theory: a further approach | 125 | ||
| 5 Consumer Behaviour in an Uncertain World | 128 | ||
| 5.1 Demand under conditions of risk and uncertainty | 129 | ||
| 5.2 Behavioural economics | 136 | ||
| Boxes | 137 | ||
| 5.1 Experimental economics | 137 | ||
| 5.2 The endowment effect | 140 | ||
| 5.3 Modelling present bias | 142 | ||
| 5.4 Nudging people | 144 | ||
| 5.5 Is economics the study of selfish behaviour? | 145 | ||
| 6 Background to Supply | 148 | ||
| 6.1 The short-run theory of production | 149 | ||
| 6.2 Costs in the short run | 155 | ||
| 6.3 The long-run theory of production | 161 | ||
| 6.4 Costs in the long run | 172 | ||
| 6.5 Revenue | 176 | ||
| 6.6 Profit maximisation | 180 | ||
| Boxes | 150 | ||
| 6.1 Malthus and the dismal science of economics | 150 | ||
| 6.2 Diminishing returns in the bread shop | 153 | ||
| 6.3 The relationship between averages and marginals | 154 | ||
| 6.4 The relationship between TPP, MPP and APP | 154 | ||
| 6.5 The fallacy of using historic costs | 156 | ||
| 6.6 Are fixed costs always the same as sunk costs? | 157 | ||
| 6.7 Cost curves in practice | 161 | ||
| 6.8 The Cobb–Douglas production function | 166 | ||
| 6.9 Minimum efficient scale | 174 | ||
| 6.10 Using calculus to find the maximum profit output | 183 | ||
| 6.11 The logic of logistics | 185 | ||
| 7 Profit Maximising under Perfect Competition and Monopoly | 189 | ||
| 7.1 Alternative market structures | 190 | ||
| 7.2 Perfect competition | 191 | ||
| 7.3 Monopoly | 201 | ||
| 7.4 The theory of contestable markets | 211 | ||
| Boxes | 192 | ||
| 7.1 Concentration ratios | 192 | ||
| 7.2 Is perfect best? | 193 | ||
| 7.3 E-commerce and market structure | 198 | ||
| 7.4 Google – a monopoly abusing its market power? | 208 | ||
| 7.5 X inefficiency | 208 | ||
| 7.6 Cut-throat competition | 210 | ||
| 7.7 Airline deregulation in the USA and Europe | 214 | ||
| 8 Profit Maximising under Imperfect Competition | 217 | ||
| 8.1 Monopolistic competition | 218 | ||
| 8.2 Oligopoly | 221 | ||
| 8.3 Game theory | 234 | ||
| 8.4 Price discrimination | 241 | ||
| Boxes | 219 | ||
| 8.1 Selling ice cream as a student | 219 | ||
| 8.2 Increasing concentration | 222 | ||
| 8.3 OPEC | 226 | ||
| 8.4 Buying power | 233 | ||
| 8.5 The prisoners’ dilemma | 237 | ||
| 8.6 What’s the train fare to London? | 242 | ||
| 8.7 Peak-load pricing | 243 | ||
| 8.8 Just the ticket? | 247 | ||
| 9 The Behaviour of Firms | 250 | ||
| 9.1 Problems with traditional theory | 251 | ||
| 9.2 Behavioural economics of the firm | 252 | ||
| 9.3 Alternative maximising theories | 255 | ||
| 9.4 Asymmetric information and the principal–agent problem | 265 | ||
| 9.5 Multiple aims | 268 | ||
| 9.6 Pricing in practice | 271 | ||
| Boxes | 252 | ||
| 9.1 What do you maximise? | 252 | ||
| 9.2 How firms increase profits by understanding ‘irrational’ consumers | 254 | ||
| 9.3 When is a theory not a theory? | 256 | ||
| 9.4 Merger activity | 262 | ||
| 9.5 The US sub-prime housing crisis | 266 | ||
| 9.6 Stakeholder power? | 269 | ||
| 9.7 How do companies set prices? | 272 | ||
| 10 The Theory of Distribution of Income | 277 | ||
| 10.1 Wage determination under perfect competition | 278 | ||
| 10.2 Wage determination in imperfect markets | 287 | ||
| 10.3 Capital and profit | 300 | ||
| 10.4 Land and rent | 310 | ||
| Boxes | 279 | ||
| 10.1 Labour as a factor of production | 279 | ||
| 10.2 Using indifference curve analysis to derive the individual’s supply curve of labour | 281 | ||
| 10.3 Immigration and the UK labour market | 282 | ||
| 10.4 Life at the mill | 288 | ||
| 10.5 The rise and decline of the labour movement in the UK | 292 | ||
| 10.6 How useful is marginal productivity theory? | 292 | ||
| 10.7 The persistent gender pay gap? | 294 | ||
| 10.8 Flexible labour markets and the flexible firm | 296 | ||
| 10.9 Behaviour at work | 298 | ||
| 10.10 Stocks and flows | 303 | ||
| 10.11 The economics of non-renewable resources | 312 | ||
| Part D MICROECONOMIC POLICY | 315 | ||
| 11 Inequality, Poverty and Policies to Redistribute Income | 316 | ||
| 11.1 Inequality and poverty | 317 | ||
| 11.2 Taxes, benefits and the redistribution of income | 328 | ||
| Boxes | 326 | ||
| 11.1 Poverty in the past | 326 | ||
| 11.2 Minimum wage legislation | 330 | ||
| 11.3 The Laffer curve | 337 | ||
| 11.4 Tax cuts and incentives | 339 | ||
| 11.5 UK tax credits | 342 | ||
| 11.6 What the future holds | 345 | ||
| 12 Markets, Efficiency and the Public Interest | 347 | ||
| 12.1 Efficiency under perfect competition | 348 | ||
| 12.2 The case for government intervention | 356 | ||
| 12.3 Forms of government intervention | 369 | ||
| 12.4 Cost–benefit analysis | 378 | ||
| 12.5 Government failure and the case for the market | 386 | ||
| Boxes | 364 | ||
| 12.1 The police as a public service | 364 | ||
| 12.2 A commons solution | 365 | ||
| 12.3 Should health-care provision be left to the market? | 370 | ||
| 12.4 Deadweight loss from taxes on goods and services | 373 | ||
| 12.5 What price a human life? | 381 | ||
| 12.6 HS2: is it really worth it? | 382 | ||
| 12.7 Mises, Hayek and the Mont Pelerin Society | 388 | ||
| 13 Environmental Policy | 391 | ||
| 13.1 Economics of the environment | 392 | ||
| 13.2 Policies to tackle pollution and its effects | 397 | ||
| 13.3 The economics of traffic congestion | 408 | ||
| 13.4 Urban transport policies | 413 | ||
| Boxes | 394 | ||
| 13.1 A Stern warning | 394 | ||
| 13.2 Green taxes | 400 | ||
| 13.3 International co-ordination on climate change | 404 | ||
| 13.4 Trading our way out of climate change | 406 | ||
| 13.5 Road pricing in Singapore | 416 | ||
| 13.6 The economy and the environment | 418 | ||
| 14 Government Policy towards Business | 421 | ||
| 14.1 Competition policy | 422 | ||
| 14.2 Privatisation and regulation | 432 | ||
| Boxes | 426 | ||
| 14.1 Fixing prices at mini-golf meetings? | 426 | ||
| 14.2 Expensive chips? | 428 | ||
| 14.3 Megabrew | 431 | ||
| 14.4 Selling power to the people | 438 | ||
| Part E FOUNDATIONS OF MACROECONOMICS | 443 | ||
| 15 An Introduction to Macroeconomic Issues and Ideas | 444 | ||
| 15.1 An overview of key macroeconomic issues | 445 | ||
| 15.2 Measuring national income and output | 452 | ||
| 15.3 The business cycle | 457 | ||
| 15.4 The circular flow of income | 463 | ||
| 15.5 Unemployment | 466 | ||
| 15.6 Inflation | 472 | ||
| 15.7 The open economy | 478 | ||
| Appendix: Calculating GDP | 485 | ||
| Boxes | 454 | ||
| 15.1 Which country is better off? | 454 | ||
| 15.2 Can GDP measure national happiness? | 456 | ||
| 15.3 Output gaps | 460 | ||
| 15.4 The costs of unemployment | 467 | ||
| 15.5 The costs of inflation | 475 | ||
| 15.6 The Phillips curve | 476 | ||
| 15.7 Dealing in foreign exchange | 484 | ||
| 16 The Development of Macroeconomic Thinking: a Historical Perspective | 491 | ||
| 16.1 The macroeconomic environment and debates | 492 | ||
| 16.2 Classical macroeconomics | 493 | ||
| 16.3 The Keynesian revolution | 498 | ||
| 16.4 The rise of the monetarist and new classical schools | 502 | ||
| 16.5 The Keynesian response | 506 | ||
| 16.6 An emerging consensus up to the crisis of 2008 | 510 | ||
| 16.7 The financial crisis and the search for a new consensus | 512 | ||
| Boxes | 496 | ||
| 16.1 Balance the budget at all costs | 496 | ||
| 16.2 The crowding-out effect | 497 | ||
| 16.3 Will wage cuts cure unemployment? | 499 | ||
| 16.4 Menu costs | 508 | ||
| 16.5 The paradox of thrift | 515 | ||
| Part F MACROECONOMIC MODELS, THEORIES AND POLICY | 519 | ||
| 17 Short-run Macroeconomic Equilibrium | 520 | ||
| 17.1 Background to the theory | 521 | ||
| 17.2 The determination of national income | 533 | ||
| 17.3 The simple Keynesian analysis of unemployment and inflation | 538 | ||
| 17.4 The Keynesian analysis of the business cycle | 541 | ||
| Boxes | 526 | ||
| 17.1 Using calculus to derive the MPC | 526 | ||
| 17.2 The household sector balance sheets | 528 | ||
| 17.3 Sentiment and spending | 530 | ||
| 17.4 Deriving the multiplier formula | 537 | ||
| 17.5 Allowing for inflation in the 45° line diagram | 542 | ||
| 17.6 Has there been an accelerator effect in the UK? | 546 | ||
| 18 Banking, Money and Interest Rates | 551 | ||
| 18.1 The meaning and functions of money | 552 | ||
| 18.2 The financial system | 553 | ||
| 18.3 The supply of money | 572 | ||
| 18.4 The demand for money | 580 | ||
| 18.5 Equilibrium | 584 | ||
| Boxes | 552 | ||
| 18.1 Money supply, national income and national wealth | 552 | ||
| 18.2 The growth of banks’ balance sheets | 558 | ||
| 18.3 The rise of securitisation | 562 | ||
| 18.4 UK and eurozone monetary aggregates | 573 | ||
| 18.5 Calculating the money multiplier | 576 | ||
| 19 The Relationship between the Money and Goods Markets | 587 | ||
| 19.1 The effects of monetary changes on national income | 588 | ||
| 19.2 The monetary effects of changes in the goods market | 600 | ||
| 19.3 Modelling the interaction of monetary policy and the goods market | 604 | ||
| 19.4 Credit cycles and the goods market | 610 | ||
| Appendix: The IS/LM model | 615 | ||
| Boxes | 594 | ||
| 19.1 Choosing the exchange rate or the money supply | 594 | ||
| 19.2 Party games and the velocity of money | 596 | ||
| 19.3 The stability of the velocity of circulation | 598 | ||
| 19.4 Crowding out in an open economy | 602 | ||
| 19.5 The financial accelerator and fluctuations in aggregate demand | 614 | ||
| 20 Aggregate Supply, Inflation and Unemployment | 622 | ||
| 20.1 The AD/AS model | 623 | ||
| 20.2 AD/AS and inflation | 626 | ||
| 20.3 Aggregate demand and supply with inflation targeting: The DAD/DAS model | 630 | ||
| 20.4 The labour market and aggregate supply | 634 | ||
| 20.5 AD/AS and macroeconomic controversies | 639 | ||
| Boxes | 625 | ||
| 20.1 Short-run aggregate supply | 625 | ||
| 20.2 Cost-push inflation and supply shocks | 629 | ||
| 20.3 Analysing demand-pull and cost-push inflation using the DAD/DAS model | 633 | ||
| 20.4 Common ground between economists? | 643 | ||
| 21 The Relationship between Inflation, Unemployment and Output | 645 | ||
| 21.1 The EAPC and the inflation–unemployment relationship | 646 | ||
| 21.2 Inflation and unemployment: the monetarist perspective | 649 | ||
| 21.3 Inflation and unemployment: the new classical position | 652 | ||
| 21.4 Inflation and unemployment: the modern Keynesian position | 656 | ||
| 21.5 Inflation, unemployment and output: credibility and central banks | 660 | ||
| Boxes | 647 | ||
| 21.1 Basing expectations on the past | 647 | ||
| 21.2 The accelerationist hypothesis | 651 | ||
| 21.3 The rational expectations revolution | 653 | ||
| 21.4 Forecasting the weather | 654 | ||
| 21.5 The boy who cried ‘Wolf’ | 655 | ||
| 21.6 Inflation bias | 662 | ||
| 21.7 Inflation targeting | 664 | ||
| 21.8 Inflation shocks and central banks | 666 | ||
| 22 Fiscal and Monetary Policy | 669 | ||
| 22.1 Fiscal policy and the public finances | 670 | ||
| 22.2 The use of fiscal policy | 676 | ||
| 22.3 Monetary policy | 686 | ||
| 22.4 The policy-making environment | 704 | ||
| 22.5 Central banks, economic shocks and the macroeconomy: an integrated model | 707 | ||
| Boxes | 675 | ||
| 22.1 Primary surpluses and sustainable debt | 675 | ||
| 22.2 The financial crisis and the UK fiscal policy yo-yo | 680 | ||
| 22.3 Riding a switchback | 683 | ||
| 22.4 The evolving fiscal framework in the European Union | 684 | ||
| 22.5 The operation of monetary policy in the UK | 690 | ||
| 22.6 Central banking and monetary policy in the USA | 692 | ||
| 22.7 Monetary policy in the eurozone | 696 | ||
| 22.8 Goodhart’s law | 700 | ||
| 22.9 Using interest rates to control both aggregate demand and the exchange rate | 701 | ||
| 22.10 Quantitative easing | 702 | ||
| 23 Long-term Economic Growth and Supply-side Policies | 713 | ||
| 23.1 Introduction to long-term economic growth | 714 | ||
| 23.2 Economic growth without technological progress | 718 | ||
| 23.3 Economic growth with technological progress | 723 | ||
| 23.4 Approaches to supply-side policy | 729 | ||
| 23.5 Supply-side policies in practice: market-orientated policies | 732 | ||
| 23.6 Supply-side policies in practice: interventionist policies | 738 | ||
| Boxes | 720 | ||
| 23.1 Getting intensive with capital | 720 | ||
| 23.2 Labour productivity | 724 | ||
| 23.3 UK human capital | 728 | ||
| 23.4 The supply-side revolution in the USA | 732 | ||
| 23.5 A new approach to industrial policy | 739 | ||
| 23.6 Unemployment and supply-side policies | 743 | ||
| Part G THE WORLD ECONOMY | 745 | ||
| 24 International Trade | 746 | ||
| 24.1 The advantages of trade | 747 | ||
| 24.2 Arguments for restricting trade | 761 | ||
| 24.3 Preferential trading | 771 | ||
| 24.4 The European Union | 775 | ||
| 24.5 The UK and Brexit | 781 | ||
| Boxes | 750 | ||
| 24.1 Trading places | 750 | ||
| 24.2 Sharing out the jobs | 753 | ||
| 24.3 Trade as exploitation? | 755 | ||
| 24.4 Free trade and the environment | 762 | ||
| 24.5 Strategic trade theory | 763 | ||
| 24.6 The optimum tariff or export tax | 765 | ||
| 24.7 Giving trade a bad name | 766 | ||
| 24.8 The Doha development agenda | 768 | ||
| 24.9 Mutual recognition: the Cassis de Dijon case | 777 | ||
| 24.10 Features of the single market | 778 | ||
| 25 The Balance of Payments and Exchange Rates | 786 | ||
| 25.1 Alternative exchange rate regimes | 787 | ||
| 25.2 Fixed exchange rates | 797 | ||
| 25.3 Free-floating exchange rates | 802 | ||
| 25.4 Exchange rate systems in practice | 810 | ||
| Appendix: The open economy and ISLM analysis | 817 | ||
| Boxes | 789 | ||
| 25.1 The balance of trade and the public-sector budget balance | 789 | ||
| 25.2 The UK’s balance of payments deficit | 790 | ||
| 25.3 The effectiveness of fiscal and monetary policies under fixed exchange rates | 799 | ||
| 25.4 The price of a Big Mac | 804 | ||
| 25.5 The euro/dollar seesaw | 806 | ||
| 25.6 The effectiveness of monetary and fiscal policies under floating exchange rates | 809 | ||
| 25.7 Sterling since the 1990s | 814 | ||
| 25.8 Do inflation rates explain longer-term exchange rate movements? | 816 | ||
| 26 Economies in an Interdependent World | 823 | ||
| 26.1 Globalisation and the problem of instability | 824 | ||
| 26.2 European economic and monetary union (EMU) | 830 | ||
| 26.3 Global inequality | 838 | ||
| 26.4 Trade and developing countries | 844 | ||
| 26.5 The problem of debt | 854 | ||
| Boxes | 826 | ||
| 26.1 Economic and financial interdependencies: Trade imbalance in the US and China | 826 | ||
| 26.2 Optimal currency areas | 834 | ||
| 26.3 The Human Development Index (HDI) | 842 | ||
| 26.4 When driving and alcohol do mix | 849 | ||
| 26.5 The evolving comparative advantage of China | 852 | ||
| 26.6 A debt to the planet | 856 | ||
| Postscript: The Castaways or Vote for Caliban | 862 | ||
| Appendix 1: Some Techniques of Economic Analysis | A:1 | ||
| Appendix 2: Websites | A:15 | ||
| Threshold Concepts and Key Ideas | T:1 | ||
| Glossary | G:1 | ||
| Index | I:1 | ||
| Back Cover | Back Cover |