TABLE OF CONTENTS CHAPTER III: ELASTICITY, EFFICIENCY AND EQUITY IN A COMPETITIVE MARKET

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1 TABLE OF CONTENTS Prologue Acknowledgements Acronyms introduction PART I: MICROECONOMIC ISSUES CHAPTER I: ECONOMICS FUNDAMENTALS. CONCEPTS AND PRINCIPLES What is economics? The production possibility frontier (PPF) The principles of economics Circular flow of income - Case 2: Ecuador CHAPTER II: DEMAND AND SUPPLY Markets and Prices: Demand and Supply Market Equilibrium - Case 1: Venezuela - Case 3: Ecuador CHAPTER III: ELASTICITY, EFFICIENCY AND EQUITY IN A COMPETITIVE MARKET Elasticity of demand and supply on elasticity with answers Efficiency and equity: - Consumer surplus and producer surplus - Market Efficiency Efficiency and equity Proposed efficiency and equity exercises - Case 1: Brazil CHAPTER IV: CONSUMER THEORY. CONSUMPTION OPTIMIZATION Budget Constraint Utility Indifference curves The optimal choice of consumption Proposed

2 - Case 2: Colombia CHAPTER V: THEORY OF THE FIRM. PRODUCTION ORGANIZATION The firm and its economic problem Firm constraints The market and the competitive environment with answers Proposed - Case 1: Colombia CHAPTER VI: PRODUCTION, COSTS AND FIRM DECISIONS The production function Factors of production Total product, marginal product and average product of labor Cost curves Long-Run Average Cost Curve (LRAC) with answers Proposed - Case 1: Colombia CHAPTER VII: PERFECT AND IMPERFECT COMPETITION MARKETS What is perfect competition? Maximization of profits Short and long-run decisions Profits and losses in the short-run: breakeven point and shutdown point Equilibrium in the short-run Imperfect competition Monopoly Monopolistic Competition and Oligopoly Traditional models of oligopoly Proposed exercises - Case 1: Argentina CHAPTER VIII: INTERNATIONAL TRADE Comparative (and Absolute) Advantage and International Trade The Ricardian model of international trade Profits from international trade Consumer and producer surplus International trade restrictions

3 - Case 1: Latin America PART II: MACROECONOMIC ISSUES CHAPTER IX: MAIN MACROECONOMIC AGGREGATES Perspective and macroeconomic aspects Basic Concepts: Gross Domestic Product (GDP), employmetn, unemployment, inflation, price Level. Instruments of macroeconomic policy -Panama (Chapter IX) CHAPTER X: THE FULL-EMPLOYMENT ECONOMY, LABOUR MARKET AND POTENTIAL GDP The Classical model The labor market and potential GDP Labor Market Equilibrium: Unemployment and full employment Minimum wage Family Basket - Case 1: Brazil - Case 2: USA (Chapter X) CHAPTER XI: MONEY, INFLATION AND THE PRICE LEVEL Money: Types and functions of money The money market: Demand and supply of money Money market equilibrium Money Creation and the Money Multiplier Money multiplier Central Banks Monetary Policy and Schools of Economic Thought - Case 1: Chile CHAPTER XII: AGGREGATE SUPPLY AND DEMAND AND THE MULTIPLIER Aggregate supply/aggregate Demand model Movement along the AD and AS curves Macroeconomic equilibrium: Short and long run The Keynesian Cross The Keynesian Multiplier

4 - Case 2: Argentina CHAPTER XIII: FISCAL AND MONETARY POLICY Fiscal policy Objectives and economic environment of fiscal policy Stabilizing the business cycle: Expansionary and contractionary policies Discretionary fiscal policy and automatic stabilizers Monetary policy Objectives and economic environment of monetary policy Decision-making strategies of the Central Bank - Case 2: Latin America Chapter XIV: MACROECONOMICS OF OPEN ECONOMIES Open economy macroeconomics International trade Balance of payments Open economy with flexible exchange rates The forex market Purchasing power parity: Law of one price Effects of exchange rates on the economy Equilibrium total output (income) in an open economy The total planned spending and international sector Determining the level of imports Equilibrium solution Open economy multiplier - Case 2: Latin America Part III: NEW CONCEPTS ABOUT ECONOMY - THE ECONOMY IN THE DIGITAL AGE Chapter XV: THE ECONOMICS OF INFORMATION AND COMMUNICATIONS; AND THE GLOBAL ECONOMY Introduction The knowledge economy Development of the new economy Generation of information in the knowledge economy Characterization of knowledge economy Impact of technology on the economy Policies focused on innovation Real business cases - Case 2: World-International

5 CHAPTER XVI: BIODIVERSITY AND ECONOMICS The ecological system of the Earth The relationship between economic and ecological systems Economy of services from ecosystems Externalities: Total economic value of services from ecosystems Comparison between pollution and production Real business cases - Case 2: Colombia CHAPTER XVII: GROWTH AND DEVELOPMENT: CONCEPTS CONVERGENT? Economic Growth Comparison of the levels of global economic growth Development Development policies Real business cases - Case 1: Bolivia CHAPTER XVIII: NEW TECHNOLOGICAL DEVELOPMENT AND CHALLENGES FOR THE ECONOMY New technological development and challenges for the economy The revolution of 3D printers Economic rationality and the map of the brain activity Drones and the future of logistics Social networking and object relations Despite technological leaps, there is a further way to go APPENDIX 1: SPECIAL TOPICS ON PERU Insufficient labor productivity in Peru Social capital, sustainable development, biodiversity and genetics APPENDIX 2: ELEMENTARY MATHEMATICS FOR UNDERSTANDING ECONOMICS BIBLIOGRAPHY ABOUT THE AUTHORS ABOUT THE ENGLISH EDITOR

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