Microeconomics 4th Edition Hubbard Solutions Manual

1. The foundation
2. Special features
3. Educator resources
4. Reviewers
5. Brief contents
6. Detailed contents
7. Flexibility chart
8. Part 1 Introduction
9. Chapter 1 Economics: Foundations and models
10. Three key economic ideas
11. People are rational
12. People respond to economic incentives
13. Optimal decisions are made at the margin
14. Solved problem 1.1 Apple makes a decision at the margin
15. Scarcity, trade-offs and the economic problem that every society must solve
16. What goods and services will be produced?
17. How will the goods and services be produced?
18. Who will receive the goods and services produced?
19. Centrally planned economies versus market economies
20. The modern ‘mixed’ economy
21. Efficiency and equity
22. Economic models
23. The role of assumptions in economic models
24. Forming and testing hypotheses in economic models
25. Normative and positive analysis
26. Don’t let this happen to you
27. Don’t confuse positive analysis with normative analysis
28. Economics as a social science
29. Making the connection 1.1
30. Good economics doesn’t always mean good politics
31. Microeconomics and macroeconomics
32. Conclusion
33. An inside look
34. Robotics will hit finance jobs harder than offshoring
35. Chapter summary and problems
36. Chapter 1 Appendix
37. Using graphs and formulas
38. Graphs of one variable
39. Graphs of two variables
40. Formulas
41. Appendix Questions and problems
42. Chapter 2 Choices and trade-offs in the market
43. Production possibility frontiers and real-world trade-offs
44. Graphing the production possibility frontier
45. Increasing marginal opportunity costs
46. Making the connection 2.1
47. Trade-offs and emergency aid relief
48. Economic growth
49. Comparative advantage and trade
50. Specialisation and gains from trade
51. Absolute advantage versus comparative advantage
52. Don’t let this happen to you
53. Don’t confuse absolute advantage with comparative advantage
54. Comparative advantage and the gains from trade
55. Solved problem 2.1 Comparative advantage and the gains from trade
56. The market system
57. The gains from free markets
58. The market mechanism
59. Making the connection 2.2
60. Story of the market system in action: I, pencil
61. The role of the entrepreneur
62. The legal basis of a successful market system
63. Protection of private property
64. Making the connection 2.3
65. Illegal downloads from cyberspace
66. Enforcement of contracts and property rights
67. Conclusion
68. An inside look
69. Expansion and production mix at BMW
70. Chapter summary and problems
71. Part 2 How the market works
72. Chapter 3 Where prices come from: The interaction of demand and supply
73. The demand side of the market
74. Demand schedules and demand curves
75. The law of demand
76. Holding everything else constant: The ceteris paribus condition
77. What explains the law of demand?
78. Variables that shift market demand
79. Making the connection 3.1
80. The ageing of the Baby Boom generation
81. A change in demand versus a change in quantity demanded
82. The supply side of the market
83. Supply schedules and supply curves
84. The law of supply
85. Variables that shift supply
86. A change in supply versus a change in quantity supplied
87. Market equilibrium: Putting demand and supply together
88. How markets eliminate surpluses and shortages
89. Demand and supply both count
90. Shifts in a curve versus movements along a curve
91. The effect of demand and supply shifts on equilibrium
92. Don’t let this happen to you
93. Remember: A change in a good’s price does not cause the demand or supply curve to shift
94. The effect of shifts in supply on equilibrium
95. The effect of shifts in demand on equilibrium
96. The effect of shifts in demand and supply over time
97. Solved problem 3.1 Demand and supply both count: Pharmacists and accountants
98. Making the connection 3.2
99. The rise and rise of fitness trackers
100. Solved problem 3.2 Demand and supply both count: The Australian housing market
101. Conclusion
102. An inside look
103. PC shipments fall record 10.6% in 4Q: IDC
104. Chapter summary and problems
105. Chapter 4 Elasticity: The responsiveness of demand and supply
106. Price elasticity of demand and its measurement
107. Measuring the price elasticity of demand
108. Elastic demand and inelastic demand
109. An example of calculating price elasticities
110. The midpoint formula
111. Solved problem 4.1 Calculating the price elasticity of demand for wheat using the midpoint formula
112. When demand curves intersect, the flatter curve is more elastic
113. Polar cases of perfectly elastic and perfectly inelastic demand
114. Don’t let this happen to you
115. Don’t confuse inelastic with perfectly inelastic
116. The determinants of the price elasticity of demand
117. Availability of close substitutes
118. Length of time involved
119. Making the connection 4.1
120. The price elasticity of demand for breakfast cereal
121. Luxuries versus necessities
122. Solved problem 4.2 Using price elasticity to analyse the drug problem
123. Definition of the market
124. Share of the good in the consumer’s budget
125. The relationship between price elasticity and total revenue
126. Elasticity and revenue with a linear demand curve
127. Solved problem 4.3 Price and revenue don’t always move in the same direction
128. Estimating price elasticity of demand
129. Other demand elasticities
130. Cross-price elasticity of demand
131. Income elasticity of demand
132. Making the connection 4.2
133. Using elasticity to analyse the disappearing family farm
134. The price elasticity of supply and its measurement
135. Measuring the price elasticity of supply
136. Determinants of the price elasticity of supply
137. Making the connection 4.3
138. Why are oil prices so unstable?
139. Polar cases of perfectly elastic and perfectly inelastic supply
140. Using price elasticity of supply to predict changes in price
141. Conclusion
142. An inside look
143. Cider poised to overtake alcopops, Roy Morgan Research
144. Chapter summary and problems
145. Chapter 5 Economic efficiency, government price setting and taxes
146. Consumer surplus and producer surplus
147. Consumer surplus
148. Producer surplus
149. Making the connection 5.1
150. The consumer surplus from broadband Internet service
151. What consumer surplus and producer surplus measure
152. The efficiency of competitive markets
153. Marginal benefit equals marginal cost in competitive equilibrium
154. Economic surplus
155. Deadweight loss
156. Economic surplus and economic efficiency
157. Government intervention in the market: Price floors and price ceilings
158. Price floors: The example of agricultural markets
159. Price ceilings: The example of rent controls
160. Making the connection 5.2
161. Price floors in labour markets: The minimum wage
162. Black markets
163. Don’t let this happen to you
164. Don’t confuse scarcity with a shortage
165. Solved problem 5.1 What is the economic effect of a black market for apartments?
166. The results of government intervention: Winners, losers and inefficiency
167. Positive and normative analysis of price ceilings and price floors
168. The economic impact of taxes
169. The effect of taxes on economic efficiency
170. Tax incidence: Who actually pays a tax?
171. Solved problem 5.2 When do consumers pay all of a sales tax increase?
172. Conclusion
173. An inside look
174. Australian smokers to pay more than $45 for a packet of cigarettes from 2020
175. Chapter summary and problems
176. Chapter 5 Appendix
177. Quantitative demand and supply analysis
178. Demand and supply equations
179. Calculating consumer surplus and producer surplus
180. Appendix Questions and problems
181. Part 3 Consumers and firms
182. Chapter 6 Consumer choice and behavioural economics
183. Utility and consumer decision making
184. The economic model of consumer behaviour in a nutshell
185. Utility
186. The principle of diminishing marginal utility
187. The rule of equal marginal utility per dollar spent
188. Solved problem 6.1 Finding the optimal level of consumption
189. What if the rule of equal marginal utility per dollar does not hold?
190. Don’t let this happen to you
191. Equalise marginal utilities per dollar
192. The income effect and substitution effect of a price change
193. Where demand curves come from
194. Making the connection 6.1
195. Are there any upward-sloping demand curves in the real world?
196. Social influences on decision making
197. The effects of celebrity endorsements
198. Network externalities
199. Does fairness matter?
200. Making the connection 6.2
201. Is Uber price gouging?
202. Behavioural economics: Do people make their choices rationally?
203. Pitfalls in decision making
204. Ignoring non-monetary opportunity costs
205. Business implications of consumers ignoring non-monetary opportunity costs
206. Failing to ignore sunk costs
207. Making the connection 6.3
208. A blogger who understands the importance of ignoring sunk costs?
209. Being unrealistic about future behaviour
210. The behavioural economics of shopping
211. Solved problem 6.2 How do you get people to save more of their income?
212. Conclusion
213. An inside look
214. Celebrity endorsements
215. Chapter summary and problems
216. Chapter 6 Appendix
217. Using indifference curves and budget lines to understand consumer behaviour
218. Consumer preferences
219. The budget constraint
220. Making the connection 6A.1
221. Dell determines the optimal mix of products
222. Solved problem 6A.1 When does a price change make a consumer better off?
223. Deriving the demand curve
224. The slope of the indifference curve, the slope of the budget line and the rule of equal marginal uti
225. Appendix Questions and problems
226. Chapter 7 Technology, production and costs
227. Technology: An economic definition
228. The short run and the long run in economics
229. The difference between fixed costs and variable costs
230. Making the connection 7.1
231. Improving inventory control at Bunnings
232. Implicit costs versus explicit costs
233. Making the connection 7.2
234. Fixed costs in the publishing industry
235. The production function
236. A first look at the relationship between production and cost
237. The marginal product of labour and the average product of labour
238. The law of diminishing returns
239. Making the connection 7.3
240. Adam Smith’s famous account of the division of labour in a pin factory
241. The relationship between marginal product and average product
242. Graphing production
243. The relationship between short-run production and short-run cost
244. Marginal cost
245. The relationship between marginal cost and average total cost
246. Solved problem 7.1 The relationship between marginal cost and average total cost
247. Graphing cost curves
248. Costs in the long run
249. Economies of scale
250. Long-run average cost curves for bookshops
251. Solved problem 7.2 Using long-run average cost curves to understand business strategy
252. Making the connection 7.4
253. The colossal River Rouge: Diseconomies of scale at the Ford Motor company
254. Don’t let this happen to you
255. Don’t confuse diminishing returns with diseconomies of scale
256. Conclusion
257. An inside look
258. Can economies of scale rescue Tesla?
259. Chapter summary and problems
260. Chapter 7 Appendix
261. Using isoquants and isocosts to understand production and cost
262. Isoquants
263. Isocost lines
264. Choosing the cost-minimising combination of capital and labour
265. Making the connection 7A.1
266. The changing input mix in Walt Disney film animation
267. Solved problem 7A.1 Determining the optimal combination of inputs
268. The expansion path
269. Appendix Questions and problems
270. Part 4 Market structure and firm strategy
271. Chapter 8 Firms in perfectly competitive markets
272. Perfectly competitive markets
273. A perfectly competitive firm cannot affect the market price
274. The demand curve for the output of a perfectly competitive firm
275. Don’t let this happen to you
276. Don’t confuse the demand curve for Farmer Jones’ oats with the market demand curve for oats
277. How a firm maximises profit in a perfectly competitive market
278. Revenue for a firm in a perfectly competitive market
279. Determining the profit-maximising level of output
280. Illustrating profit or loss on the cost curve graph
281. Showing profit on the graph
282. Solved problem 8.1 Determining profit-maximising price and quantity
283. Don’t let this happen to you
284. Remember that firms maximise total profit, not profit per unit
285. Illustrating when a firm is breaking even or operating at a loss
286. Deciding whether to produce or to shut down in the short run
287. Making the connection 8.1
288. Losing money in the solar panel industry
289. Solved problem 8.2 When to shut down an oil well
290. The supply curve of the firm in the short run
291. The market supply curve in a perfectly competitive industry
292. ‘If everyone can do it, you can’t make money at it’—the entry and exit of firms in the long
293. Economic profit and the entry or exit decision
294. Long-run equilibrium in a perfectly competitive market
295. The long-run supply curve in a perfectly competitive market
296. Increasing-cost and decreasing-cost industries
297. Making the connection 8.2
298. In the App Store, easy entry makes the long run pretty short
299. Perfect competition and efficiency
300. Productive efficiency
301. Allocative efficiency
302. Dynamic efficiency
303. Solved problem 8.3 How productive efficiency and dynamic efficiency benefit consumers
304. Conclusion
305. An inside look
306. Why the sharing economy could have a hard landing in Australia
307. Chapter summary and problems
308. Chapter 9 Monopoly markets
309. Is any firm ever really a monopoly?
310. Where do monopolies come from?
311. Making the connection 9.1
312. Does Hasbro have a monopoly on Monopoly?
313. Entry blocked by government action
314. Control of a key resource
315. Network externalities
316. Making the connection 9.2
317. Are diamond (profits) forever? The De Beers diamond monopoly
318. Natural monopoly
319. How does a monopoly choose price and output?
320. Marginal revenue
321. Profit maximisation for a monopolist
322. Solved problem 9.1 Finding profit-maximising price and output for a monopolist
323. Don’t let this happen to you
324. Don’t assume that charging a higher price is always more profitable for a monopolist
325. Does monopoly reduce economic efficiency?
326. Comparing monopoly and perfect competition
327. Measuring the efficiency losses from monopoly
328. How large are the efficiency losses due to monopoly?
329. Market power and technological change
330. Government policy towards monopolies
331. Trade practices laws and enforcement
332. Mergers: The trade-off between market power and efficiency
333. Making the connection 9.3
334. Anti-competitive behaviour in the airline cargo industry
335. Regulating natural monopolies
336. Solved problem 9.2 Water restrictions and water supply companies
337. Conclusion
338. An inside look
339. Footy fans stuck with Foxtel until 2022
340. Chapter summary and problems
341. Chapter 9 Appendix
342. Price discrimination
343. The requirements for successful price discrimination
344. Solved problem 9A.1 How Dell technologies uses price discrimination to increase profits
345. Airlines: The kings of price discrimination
346. Perfect price discrimination
347. Price discrimination across time
348. Making the connection 9A.1
349. The Internet leaves you open to price discrimination
350. Appendix Questions and problems
351. Chapter 10 Monopolistic competition: The competitive model in a more realistic setting
352. Demand and marginal revenue for a firm in a monopolistically competitive market
353. The demand curve for a monopolistically competitive firm
354. Marginal revenue for a firm with a downward-sloping demand curve
355. How a monopolistically competitive firm maximises profit in the short run
356. Solved problem 10.1 How not to maximise profit
357. What happens to profit in the long run?
358. How does entry of new firms affect the profits of existing firms?
359. Don’t let this happen to you
360. Don’t confuse zero economic profit with zero accounting profit
361. Making the connection 10.1
362. The rise and decline and rise of Starbucks
363. Is zero economic profit inevitable in the long run?
364. Solved problem 10.2 Buffalo wild wings increase costs to increase demand
365. Making the connection 10.2
366. Staying one step ahead of the competition: Eugène Schueller and L’Oréal
367. Comparing perfect competition and monopolistic competition
368. Excess capacity under monopolistic competition
369. Is monopolistic competition inefficient?
370. How consumers benefit from monopolistic competition
371. How marketing differentiates products
372. Brand management
373. Advertising
374. Defending a brand name
375. What makes a firm profitable?
376. Making the connection 10.3
377. Is being the first firm in the market a key to success?
378. Conclusion
379. An inside look
380. Booming coffee market moves into consolidation phase
381. Chapter summary and problems
382. Chapter 11 Oligopoly: Markets with few competitors
383. Oligopoly and barriers to entry
384. Barriers to entry
385. Game theory and oligopoly
386. A duopoly game: Price competition between two firms
387. Firm behaviour and the prisoners’ dilemma
388. Don’t let this happen to you
389. Don’t misunderstand why each manager ends up charging a price of $450
390. Can firms escape the prisoners’ dilemma?
391. Making the connection 11.1
392. Is there a dominant strategy for bidding on eBay?
393. Solved problem 11.1 Is advertising a prisoners’ dilemma for Coca-Cola and Pepsi?
394. Cartels: The case of OPEC
395. Sequential games
396. Deterring entry
397. Solved problem 11.2 Is deterring entry always a good idea?
398. Bargaining
399. The five competitive forces model
400. Competition from existing firms
401. The threat from potential entrants
402. Competition from substitute goods or services
403. Bargaining power of buyers
404. Bargaining power of suppliers
405. Making the connection 11.2
406. Is Virgin Australia’s business strategy more important than the structure of the airline industry?
407. Conclusion
408. An inside look
409. Supermarket giant ALDI gears up for price war
410. Chapter summary and problems
411. Chapter 11 Appendix
412. Traditional models of oligopoly
413. ‘Sticky’ prices and the kinked demand curve
414. Bertrand model
415. Cournot model
416. Stackelberg model
417. Part 5 Markets for factors of production
418. Chapter 12 The markets for labour and other factors of production
419. The demand for labour
420. The marginal revenue product of labour
421. Solved problem 12.1 Hiring decisions by a firm that is a price maker
422. The market demand curve for labour and the factors that shift it
423. The supply of labour
424. The market supply curve of labour and the factors that shift it
425. Equilibrium in the labour market
426. The effect on equilibrium wages of a shift in labour demand
427. Making the connection 12.1
428. Will your future income depend on which courses you take at university?
429. The effect on equilibrium wages of a shift in labour supply
430. Making the connection 12.2
431. Should you fear the effect of robots on the labour market?
432. Explaining differences in wages
433. Don’t let this happen to you
434. Remember that prices and wages are determined at the margin
435. Making the connection 12.3
436. Technology and the earnings of ‘superstars’
437. Compensating differentials
438. Discrimination
439. Trade unions
440. Solved problem 12.2 Is ‘comparable worth’ legislation the answer to closing the gap between men
441. Personnel economics
442. Should workers’ pay depend on how much they work or on how much they produce?
443. Other considerations in setting compensation schemes
444. The markets for capital and natural resources
445. The market for capital
446. Solved problem 12.3 How to receive your payments
447. The market for natural resources
448. Monopsony
449. The marginal productivity theory of income distribution
450. Conclusion
451. An inside look
452. Watson, Marsh go big in IPL auction
453. Chapter summary and problems
454. Part 6 The international economy
455. Chapter 13 Comparative advantage and the gains from international trade
456. An overview of international trade
457. The importance of trade to the Australian economy
458. Australian international trade in a world context
459. Making the connection 13.1
460. Has offshoring hurt the Australian economy?
461. Comparative advantage in international trade
462. A brief review of comparative advantage
463. Comparative advantage and absolute advantage
464. How countries gain from international trade
465. Increasing consumption through trade
466. Solved problem 13.1 The gains from trade
467. Why don’t we see complete specialisation?
468. Does anyone lose as a result of international trade?
469. Don’t let this happen to you
470. Remember that trade creates both winners and losers
471. Where does comparative advantage come from?
472. Government policies that restrict international trade
473. Tariffs
474. Quotas
475. Measuring the economic impact of the sugar quota
476. Solved problem 13.2 Measuring the economic effect of a quota
477. Gains from unilateral elimination of tariffs and quotas
478. Domestic support policies
479. Other barriers to trade
480. The arguments over trade policies and globalisation
481. Why do some people oppose the World Trade Organization?
482. Dumping
483. Making the connection 13.2
484. The unintended consequences of banning goods made with child labour
485. Radical environmentalism
486. Positive versus normative analysis (once again)
487. Conclusion
488. An inside look
489. Australia’s long-awaited free trade deal with China finally comes into force
490. Chapter summary and problems
491. Part 7 The role of government
492. Chapter 14 Government intervention in the market
493. What’s good about markets?
494. The economic bases for government intervention
495. Making the connection 14.1
496. Should drugs be legal?
497. Market failure and government failure
498. Don’t let this happen to you
499. Just because something is wrong, it doesn’t mean the government has to put it right
500. Deregulation and privatisation
501. The legal system
502. The rule of law
503. Patents, trademarks and copyright protection
504. Making the connection 14.2
505. Who owns the Wizard of Oz?
506. Asymmetric information
507. Adverse selection and the market for ‘lemons’
508. Reducing adverse selection in the car market
509. Asymmetric information in the market for insurance
510. Reducing adverse selection in the insurance market
511. Moral hazard
512. Don’t let this happen to you
513. Don’t confuse adverse selection with moral hazard
514. Making the connection 14.3
515. Why is the cost of health care rising in Australia?
516. Adverse selection and moral hazard in financial markets
517. Solved problem 14.1 Do minimum wages increase adverse selection and moral hazard?
518. Reducing adverse selection and moral hazard in financial markets
519. Conclusion
520. An inside look
521. Keeping up or holding back? The regulation challenge for government
522. Chapter summary and problems
523. Chapter 15 Externalities, environmental policy and public goods
524. Externalities and efficiency
525. The effect of externalities
526. How externalities in production reduce economic efficiency
527. How externalities in consumption reduce economic efficiency
528. Externalities and market failure
529. What causes externalities?
530. Private solutions to externalities: The Coase theorem
531. The economically efficient level of pollution reduction
532. Making the connection 15.1
533. The reduction in lead in Melbourne’s air
534. Don’t let this happen to you
535. Remember that it’s the net benefit that counts
536. The basis for private solutions to externalities
537. Do property rights matter?
538. The problem of transactions costs
539. The Coase theorem
540. Making the connection 15.2
541. The fable of the bees
542. Government policies to deal with externalities
543. Policies for externalities in production
544. Policies for externalities in consumption
545. Command and control and market-based approaches
546. Making the connection 15.3
547. Should the government tax soft drinks?
548. Solved problem 15.1 Using a tax to deal with a negative externality
549. Licences to pollute?
550. Making the connection 15.4
551. Can a price on carbon reduce global warming?
552. Four categories of goods
553. The demand for a public good
554. Common resources
555. Conclusion
556. An inside look
557. Too big to fail: China pledges to set up landmark emissions trading scheme
558. Chapter summary and problems
559. Chapter 16 The distribution of income and social policy
560. The tax system
561. An overview of the Australian tax system
562. Progressive and regressive taxes
563. Making the connection 16.1
564. Which groups pay the most in taxes?
565. Marginal and average income tax rates
566. Evaluating taxes
567. Tax incidence revisited: The effect of price elasticity
568. Don’t let this happen to you
569. Remember not to confuse who pays the tax with who bears the burden of the tax
570. Making the connection 16.2
571. Do companies really bear the burden of the federal company income tax?
572. Solved problem 16.1 The effect of price elasticity on the excess burden of a tax
573. Income distribution and poverty
574. Measuring the distribution of income and poverty
575. The poverty rate in Australia
576. Explaining income inequality
577. Showing the income distribution with a Lorenz curve
578. Problems in measuring poverty and the distribution of income
579. Solved problem 16.2 Are many individuals stuck in poverty?
580. Income distribution and poverty around the world
581. Conclusion
582. An inside look
583. 3.6 million households pay no net tax after churn
584. Chapter summary and problems
585. Glossary
586. Index

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