ECONOMICS FOURTEENTH EDITION GLOBAL EDITION ◆◆◆◆◆◆ MICHAEL PARKIN University of Western Ontario A01_PARK3639_14_GE_FM.indd 1 22/04/22 9:55 AM Please contact https://support.pearson.com/getsupport/s/contactsupport with any queries on this content. Acknowledgments of third-party content appear on the appropriate page within the text. Pearson Education Limited KAO Two KAO Park Hockham Way Harlow Essex CM17 9SR United Kingdom and Associated Companies throughout the world Visit us on the World Wide Web at: www.pearsonglobaleditions.com © Pearson Education Limited 2023 The right of Michael Parkin to be identified as the author of this work, has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988. Authorized adaptation from the Global Editions, entitled Microeconomics, 14th Edition, ISBN 978-1-292-43459-9, and Macroeconomics, 14th Edition, ISBN: 978-1-292-43360-8 by Michael Parkin, published by Pearson Education © 2023. All rights reserved. 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While we work hard to present unbiased, fully accessible content, we want to hear from you about any concerns or needs with this Pearson product so that we can investigate and address them. • Please contact us with concerns about any potential bias at https://www.pearson.com/report-bias.html. • For accessibility-related issues, such as using assistive technology with Pearson products, alternative text requests, or accessibility documentation, email the Pearson Disability Support team at [email protected]. A01_PARK3639_14_GE_FM.indd 3 22/04/22 9:55 AM TO ROBIN A01_PARK3639_14_GE_FM.indd 4 22/04/22 9:55 AM ◆◆◆◆◆◆◆◆◆◆◆◆ ABOUT THE AUTHOR Michael Parkin is Professor Emeritus in the Department of Economics at the University of Western Ontario, Canada. Professor Parkin has held faculty appointments at Brown University, the University of Manchester, the University of Essex, and Bond University. He is a past president of the Canadian Economics Association and has served on the editorial boards of the A merican Economic Review and the Journal of Monetary Economics and as managing editor of the C anadian Journal of Economics . Professor Parkin’s research on macroeconomics, monetary economics, and international economics has resulted in over 160 publications in journals and edited volumes, including the A merican Economic Review , the Journal of Political Economy, the Review of Economic Studies , the Journal of Monetary Economics, and the Journal of Money, Credit and Banking . He became most visible to the public with his work on inflation that discredited the use of wage and price controls. Michael Parkin also spearheaded the movement toward European monetary union. Professor Parkin is an experienced and dedicated teacher of introductory economics. 5 A01_PARK3639_14_GE_FM.indd 5 22/04/22 9:55 AM This page intentionally left blank A01_PARK3639_14_GE_FM.indd 6 22/04/22 9:55 AM ◆◆◆◆◆◆◆◆◆◆◆◆ BRIEF CONTENTS PART ONE PART SIX INTRODUCTION 3 9 FACTOR MARKETS, INEQUALITY, CHAPTER 1 What Is Economics? 39 AND UNCERTAINTY 461 C HAPTER 2 The Economic Problem 71 CHAPTER 1 8 Markets for Factors of Production 461 CHAPTER 1 9 Economic Inequality 487 PART TWO CHAPTER 20 Uncertainty and Information 5 11 HOW MARKETS WORK 9 7 CHAPTER 3 Demand and Supply 97 PART SEVEN MONITORING MACROECONOMIC C HAPTER 4 Elasticity 125 CHAPTER 5 Efficiency and Equity 147 PERFORMANCE 533 CHAPTER 6 Government Actions in Markets 1 69 CHAPTER 2 1 Measuring the Value of Production: CHAPTER 7 Global Markets in Action 193 GDP 533 CHAPTER 2 2 Monitoring Jobs and Inflation 557 PART THREE HOUSEHOLDS’ CHOICES 219 PART EIGHT MACROECONOMIC TRENDS 581 CHAPTER 8 Utility and Demand 219 CHAPTER 9 Possibilities, Preferences, CHAPTER 2 3 Economic Growth 581 and Choices 243 CHAPTER 2 4 Finance, Saving, and Investment 609 CHAPTER 2 5 Money, the Price Level, and PART FOUR Inflation 631 FIRMS AND MARKETS 265 CHAPTER 26 The Exchange Rate and the Balance of CHAPTER 1 0 Organizing Production 265 Payments 661 CHAPTER 1 1 Output and Costs 289 PART NINE CHAPTER 12 Perfect Competition 313 MACROECONOMIC FLUCTUATIONS 691 CHAPTER 1 3 Monopoly 3 39 CHAPTER 2 7 Aggregate Supply and Aggregate CHAPTER 14 Monopolistic Competition 365 Demand 691 CHAPTER 1 5 Oligopoly 383 CHAPTER 2 8 Expenditure Multipliers 715 PART FIVE CHAPTER 2 9 The Business Cycle, Inflation, and MARKET FAILURE AND GOVERNMENT 411 Deflation 745 CHAPTER 1 6 Public Choices, Public Goods, PART TEN and Healthcare 411 MACROECONOMIC POLICY 771 CHAPTER 17 Externalities 433 CHAPTER 30 Fiscal Policy 771 CHAPTER 31 Monetary Policy 797 7 A01_PARK3639_14_GE_FM.indd 7 22/04/22 9:55 AM ◆◆◆◆◆◆◆◆◆◆◆◆ ALTERNATIVE PATHWAYS THROUGH MICRO CHAPTERS Micro Flexibility Chapter 1 Chapter 5 Chapter 6 Chapter 16 What Is Economics? Efficiency and Equity Government Actions Public Choices, in Markets Public Goods, and Healthcare Chapter 2 Chapter 19 Chapter 7 Chapter 17 The Economic Problem Economic Inequality Global Markets Externalities in Action Chapter 3 Chapter 4 Chapter 12 Demand and Supply Elasticity Perfect Competition Chapter 13 Chapter 10 Chapter 11 Monopoly Organizing Production Output and Costs Chapter 14 Chapter 20 Chapter 8 Monopolistic Uncertainty and Competition Utility and Demand Information Chapter 15 Chapter 9 Oligopoly Possibilities, Preferences, and Choices Chapter 18 Markets for Factors of Production Start here ... … then jump to … and jump to any of these after any of these … doing the prerequisites indicated 8 A01_PARK3639_14_GE_FM.indd 8 22/04/22 9:55 AM ◆◆◆◆◆◆◆◆◆◆◆◆ ALTERNATIVE PATHWAYS THROUGH MACRO CHAPTERS Macro Flexibility Chapter 1 Chapter 23 What Is Economics? Economic Growth Chapter 2 Chapter 24 Chapter 30 The Economic Problem Finance, Saving, Fiscal Policy and Investment Chapter 21 Chapter 3 Chapter 27 Chapter 29 Measuring the Value Demand and Supply of Production: GDP Aggregate Supply and The Business Cycle, Aggregate Demand Inflation, and Deflation Chapter 22 Chapter 24 Chapter 31 Monitoring Jobs and Inflation Finance, Saving, Monetary Policy and Investment Chapter 25 Money, the Price Level, and Inflation Chapter 26 The Exchange Rate and the Balance of Payments Chapter 28 Expenditure Multipliers Start here ... … then jump to … and jump to any of these after any of these … doing the prerequisites indicated 9 A01_PARK3639_14_GE_FM.indd 9 22/04/22 9:55 AM