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Mankiw Microeconomics Solutions (Not 6th Edition)
Mankiw Microeconomics Solutions (Not 6th Edition)
Microeconomics Macroeconomics
chapters chapters
1. Ten Principles of Economics 1 1
2. Thinking Like an Economist 2 2
3. Interdependence and the Gains from Trade 3 3
4. The Market Forces of Supply and Demand 4 4
5. Elasticity and Applications 5 5
6. Supply, Demand, and Government Policies 6 6
7. Consumers, Producers and the Efficiency of Markets 7 7
8. Application: The Costs of Taxation 8 8
9. Application: International Trade 9 9
10. Externalities 10 --
11. Goods and Common Resources 11 --
12. The Tax System 12 --
13. The Costs of Production 13 --
14. The Competitive Firm 14 --
15. Monopoly 15 --
16. Oligopoly 16 --
17. Monopolistic Competition 17 --
18. The Markets for the Factors of Production 18 --
19. Earnings and Discrimination 19 --
20. The Distribution of Income 20 --
21. The Theory of Consumer Choice 21 --
22. Measuring a Nation's Wealth -- 10
23. Measuring the Cost of Living -- 11
24. Production and Growth -- 12
25. Financial Markets: Saving, Investment, -- 13
and Interest Rates --
26. Unemployment -- 14
27. The Monetary System -- 15
28. Inflation: Its Causes and Costs -- 16
29. Open-Economy Macroeconomics: Basic Concepts -- 17
30. A Macroeconomic Theory of the Open Economy -- 18
31. Aggregate Demand and Aggregate Supply -- 19
32. Monetary and Fiscal Policy Determinants of -- 20
Aggregate Demand
33. The Short-Run Tradeoff between Inflation -- 21
andUnemployment
34. Five Debates over Macroeconomic Policy -- 22
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Economics Pages
100
250
Sociology Pages
Cars (millions)
U.S.
Japan
500 1000
Grain (millions of tons)
20
Cars (millions)
A B
10
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Price of Pizza
D1
D2
Quantity of Pizza
(
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6 (
S2
S1
Price of Oranges
Quantity of Oranges
( ! ! 7 8 "
! 0 "
! "
"5 &%$"! !
!
" !
Price of Caribbean Hotel Rooms
D1
D2
Quantity of Caribbean Hotel Rooms
S2
Price of Gasoline
S1
Quantity of Gasoline
S1
Price of Used Cadillacs
S2
D1
D2
Quantity of Used Cadillacs
Price of Notebooks
D2
D1
Quantity of Notebooks
S
Price of Notebooks
D2
D1
Quantity of Notebooks
S2
Price of Sweatshirts
S1
Quantity of Sweatshirts
Price of Sweatshirts
D1
D2
Quantity of Sweatshirts
S
Price of Sweatshirts
D2
D1
Quantity of Sweatshirts
S1
S2
Price of Sweatshirts
Quantity of Sweatshirts
S
Price of Babysitting Services
D1 D2
S
Price of Cigars
D2
D1
Quantity of Cigars
S
Price of Pizza
D1
D2
Quantity of Pizza
Price of Computers
D
Quantity of Computers
S
Price of Software
D2
D1
Quantity of Software
S1
S2
Price of Bagels
Quantity of Bagels
1 " !
! "5 &%.
! 1"
! !! !
!
S
Price of Cream Cheese
D2
D1
S1
S2
Price of Bagels
D1
D2
Quantity of Bagels
S
Price of Basketball Tickets
$8
D
8,000
Quantity of Basketball Tickets
# !
5 &%$ ;=<"!
;=< ! "
" ! !
! 0) !
#
S
Price of Champagne
D2
D1
Quantity of Champagne
S1 S1 S1 S1
P P P S2 P S2
S2 S2
D D
D D
Q Q Q Q
S1 S1 S S1 S1
S2 2 S2 S2
P P P P
D D
D D
Q Q Q Q
& !
# "
6 "
" 6
P
Area of rectangle
= total spending
by consumers
= total revenue received
by producers
=PxQ D
Q
Quantity
5 42& ! 315!
'
42& !
.
5 * ( ! !
!
% (
!
.
* .0 / -
1" - -2/ "
% " "
P1
Demand
Q1
Quantity of Beer
' "("% " 3! "" "(
* .0!/ " 1(
% " " 103!/ - "" 2
Price of Beer
Supply
P2
P1
P2 − $2
Demand
Q2 Q1
Quantity of Beer
Pf
P1
Demand
Q2 Q1 Q3
Quantity of Cheese
, 4" ) "" 00
'(* .0+( " "%
:" % 54 "" (
% ;,7 <5/ -
-2( " 1(" % ";
"< " 1 0,7 4 " "
( " "% " ;,7 <
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< " "
% "" 5( - -
2( " 1;" "
% <(" % " " 1 0,7
S2
Price of Gasoline
S1
P2
P1
P2 − 50¢
D1
D2
Q2 Q1
Quantity of Gasoline
Price of Gasoline
tax
D1
tax
D2
Q1 Q2
Quantity of Gasoline
/
unemployment
Wage
A
wm Supply
B
w1
Demand
D C
Q2 Q 1 Q3
Quantity of Labor
/ " / 6
" " "" "
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11("" - 22
Price of Guns
Supply
P2
P1
P2 − tax
D1
D2
Q2 Q1
Quantity of Guns
S2
Price of Guns
S1
P2
P1
P2 − tax
Demand
Q2 Q1
Quantity of Guns
Supply
Price of Guns
Pf
P1
Demand
Q2 Q1 Q3
Quantity of Guns
Supply
Price of Guns
P1
P2
D1
D2
Q2 Q1
Quantity of Guns
8 1 " " "
" " (* .0 " "%
::/ (
" (
( 55/ " -
22
Supply
Price of Guns
P1
P2
D1
D2
Q2 Q1
Quantity of Guns
7 *( A - "- "
$--" " ""- "% !70!1?10""@
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Ps
P1
PD
D2
D1
Q1 Q2
Quantity of Ice-Cream Cones
Supply
Consumer
Equilibrium surplus
Price
price Producer
surplus
Demand
Equilibrium quantity
Quantity
0 , , * 1,
,
2
, * + 3* 2
, ) , 2 * +
S2
S1
Price of Lemons
A
P2
B C
P1
Demand
Quantity of Lemons
4 ,
% &'$
/535%6/35%7
,
,
Price of Lemonade
S1
D
P2
E F
P1
Demand
Quantity of Lemonade
Supply
Price of French Bread
P2
B C
P1
A
D2
D1
Q1 Q2
Quantity of French Bread
Price of Flour
Supply
P2
E F
P1 D
D2
D1
Quantity of Flour
1 :& ;
:.:&
:$:. !
::$ $
: (
Price of Water
$6
$5 A
$4
$3 B
$2
$1
1 2 3 4
Quantity of Water
# 9
1 :& (
:.:& $
:$:. !
::$
: ;
Price of Water
$7
$6
$5 B
$4
$3
A
$2
$1
1 2 3 4
Quantity of Water
< :(:03
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:. >:0 :?:$
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8
:! $
:( ! !
:0 $
S1 S2
A
Price of Computers
P1
B C D
P2 G
E F
Demand
Q1 Q2
Quantity of Computers
A
S1
B
S2
Demand
Quantity of Computers
Price of Haircut
Phil
$7
$6
B
Geraldo
$5
$4
C
$3 A
Oprah
$2 D
$1
1 2 3 4
Quantity of Haircuts
Supply
Demand
Q2 Q1
Quantity
Demand
Q1 Q3
Quantity
$100 Supply
$20
Demand
Q1 Q2
Quantity of Medical Procedures
*
S2
Price of Water
S1
P2
P1
Demand
Q3 Q2 Q1
Shortage
Quantity of Water
4 *
9
9
4 #
9
* +
A Supply
PB
Price
B C
P1
D E
Ps
F
Demand
Q2 Q1
Quantity
Supply
Price of Pizza
A
PB
B C
P1
D E
Ps
F
Demand
Q2 Q1
Quantity of Pizza
C D
Demand
Quantity of Rubber Bands
Supply
Price of Rubber Bands
A
B
C D
Demand
Price of Socks
PB
A
P1 E
B
Ps C
D F
Demand
Q2 Q1
Quantity of Socks
@ 0 %
% % &
& 0 &%
$$
A% B &A% B
% 0 %
9 " #$= % 1
. %C & ''
((
((% (-(*599(-(*5<9
B C
PB2
Price of Cars
D E
PB1
F G
PS1
H
PS2
Demand
Q2 Q 1
Quantity of Cars
Supply
A
Ps
B C D
Price
P1
E H
F G
PB
I
Demand
Q1 Q2
Quantity
0 300
T
Supply
100 +
2T
3
Price
100
100 −
T
3
Demand
200 − 2T
3
200
Quantity
Deadweight Loss
45,000
0 300
T
Domestic
supply
Price
before A
Price
trade
B D World
Price price
C Imports
after
trade Domestic
demand
Quantity
Supply
Price of Oranges
A
P1
B DE
Pw
C
Demand
Qs Q1 Qo
Quantity of Oranges
" #$! 89 3
5( :5:
!
Price of Wine
A
P2 D
B E
P1
C
Demand
Quantity of Wine
#$% !& !
'
'(
C SB
P1 G
D
pA
pB
F
Pw
H J
E P2
I
DA DB
QA QB
Country A Country B
Supply
Price
Pw+t
P1
Pw
Demand
Quantity
Supply
Price of Autos
Pw+t B
C D E F
Pw
G
Demand
A 9
(
0
. 0
(
0
0 3
S + quota
Price of Sugar
A
B
Pq
C
D E′ E″ F
Pw
G
Demand
Supply
A
Pw+s
Price of Steel
B C D
Pw
G
E F
Demand
Social cost
Supply
(private cost)
Price
Demand
(private value)
Qoptimum Qmarket
Quantity
Social value
Demand
Qmarket Qoptimum
Quantity of Fire Extinguishers
, ! ) ) '
! !! ! $
!$
0 ) ! $
! !
$ ! !
'
/ . +' !) $ ! !
'+ +') !
$ $ $
!"
! ! 2!
"
Social value
Qoptimum Qmarket
Quantity of Studded Snow Tires
Supply
Demand
Social value
Qoptimum Qmarket
Quantity of Studded Snow Tires
Supply
Demand
Social value
Qoptimum Qmarket
Quantity of Aluminum Cans
Supply
(social cost)
Price of Alcohol
A
B
C
Demand
Social value
Qoptimum Qmarket
Quantity of Alcohol
D1
D2
Q2 Q1
Quantity of Pollution
Supply of
pollution permits
Price of Pollution
P1
P2
D1
D2
Q
Quantity of Pollution
. " $ 2
! $
'!
" $'
$'' '
, . ! !'
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Average
total cost
Costs
Quantity
#
30
25
20
15
10
5
0
0 1 2 3 4 5
Hours Spent Fishing
2 ,# " " "
"* # 7
" "
; 7 )
300
Total cost
250
Costs 200
150
100
9 " " # /!, 0 " /!7 0
" /! 0 +
4 "
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; 7 !7 ! )
40
35 Marginal cost
30
Average total cost
Costs
25
Average variable cost
20
15
10
5
0
0 1 2 3 4 5 6
Quantity of Juice
, ! "
, "
, '
"
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$ %
Marginal cost
Price, Costs
Q*
Quantity
' % #
. #
2 . 0 , # #1
* # # *
#* # *
# #1 #
* * #1
# * % *
#3 % #
* , #
!" # # !$
% 4 #*
.
0 0
#
Supply
Marginal
Price
P1 cost
P2
D2 D1
Q2 Q1 q2 q1
Quantity Quantity
Industry Firm
S3
S1
Marginal
Price, Costs, Revenue
cost
Average
Price
P1 total
cost
P2
D1
D2
Q3 Q2 Q1 q2 q1
Quantity Quantity
* #
. *= %*=
5. , )*=## #
0 *= , + #
. #( # -*# #
Firm Industry
Marginal S1
Price, Costs, Revenue
cost Average S3
total cost
P2
Price
P1
D1 D2
q1 q2 Q1 Q2 Q3
Quantity Quantity
. 0 8
. * 5. ,
))* 0 #
* # *
#
1 #* # %
* .
, 0 # ( ( . #(
Firm Industry
S3
MC2 S2
MC1 S1
Price, Costs
ATC2
Price
ATC1
P3
P2
P1
Demand
q2 q3 q1 Q3 Q 2 Q 1
Quantity Quantity
Firm Industry
Marginal Supply
cost
Average
Price, Costs
total cost
Price
$30
$25
Demand
q2 q1 Q1
imports
Quantity Quantity
B &# '(? , + .
*5* )3
,, + * + *777%,
5 + * , #
Firm Industry
Marginal S2
cost S1
Average
Price, Costs
P2 total cost
ATC2
Price
P1
Demand
q1 q2 800q2 1000q1
Quantity of Pretzels Quantity of Pretzels
7 &# '(@ # #
. *:* ,
- )5 #( , * ,
0 # *
, +
Marginal
cost Supply
Average
Price, Costs
total cost
P2
Price
P1
D2
D1
q1 q2 Q1 Q2
Quantity Quantity
Price, Costs
P*
Average
ATCc total cost
Qc Q0
Quantity Quantity
Deadweight
loss
Pm Marginal cost
Demand
Marginal revenue
Qm Qc
Quantity
3 -
+ "
( " "
' + ,& "0" 2
- 2 2/9
02/: 2 //
$ % $
%" 2
Price, Cost, Revenue
Deadweight
loss Average
PATC total cost
PMC Marginal
cost
Demand
QATC QMC
Quantity
* 9 "
2 -
"
" 6 "
"
2 2
D1
MR2
Q1 Q2
MR1
Quantity of Bottled Water
3 + ,* #
# 6/" 0"
" . "
Price, Cost, Revenue
A
PC Marginal
cost
Demand
QC
Quantity of Groceries
Marginal Demand
revenue
QM QC
Quantity of Groceries
5 - "
1 9( : #
1 9" 1 9( "
9
0 / < <
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Price
Area
= 12 x 8 x 800
= 3,200 Demand
800
Quantity of Crossings
Marginal cost
P1
Average cost
AC1
Demand
Marginal revenue
Q1
Quantity of Drug Bottles
AC2
Demand
Marginal revenue
Q2
PL
PC
Demand
QM QL QC
Marginal revenue
Quantity of Drinks
Marginal
A B cost
PM
D
E
C
Marginal Demand
revenue
QM QC
Quantity of Chips
15-9
1 " 2/
.
= = =;=>";
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=
Y Y
PM
X
X
Z
Marginal cost
= Average cost
Demand
Marginal
revenue
QM QC
Quantity
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! $ $ ! $
! +
$ $
! !
. ' $ /
! * !
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!
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$ ! $ !
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! !
Marginal cost
Price1 Cost1 Revenue
P Average
total cost
Demand
Marginal revenue
Q
Quantity
/ 0' $ & 1( 1
( #
Marginal
cost
Price1 Cost1 Revenue
A B
PM
C Average
total cost
Demand
Marginal revenue
QM QC
Quantity of Sparkle Toothpaste
9 ' .# ' (
$ ' $ " (
$$9 (.# 1 $
3 $ $( # (
$ $
%# .
- % %
:
, ( '
' ' . 1 $ "
( 1# ($+ ,&!. (
Marginal cost
MCM
Demand
Marginal revenue
QM
Quantity
B 9$ # & (1$ #
"
( # $
D 0 &$ $ # ' &
$ ' # (
$ 1 ' ($
' #
- # ' ( $
# ( # $
. " - '
)# . " # #
' ($ $
Marginal cost
Price1 Cost1 Revenue
PT
MCT
Demand
Marginal revenue
QT
Quantity of Tylenol
Demand =
Pg = MCg Marginal
revenue
Qg
Quantity of Acetaminophen
# ! $% & ' " !
$ ! %% %
! % !
Supply
P2
P1
D2
D1
Q1 Q2
Quantity of Apples
Supply
w2
w1
D2
D1
L1 L2
Quantity of Labor
# 2 $
$
! "
* +%# !
,,
00
w2
Wage
w1
D2
D1
L1 L2
Quantity of Labor
2 3 $
* +%(
! //
00
S1
S2
w1
Wage
w2
Demand
L1 L2
Quantity of Labor
Supply
w2
Wage
w1
D2
D1
L1 L2
Quantity of Labor
S1
S2
Demand
K 1 K2
Quantity of Capital
Supply
Wage
w2
w1
D2
D1
L1 L2
Quantity of Labor
0 . ;-0 <;-0
= =
9 9=
9
6 6=
#
6 6=
# >
6 6=
( 4
# #=
4 +
=
6 >
* +%+ / 54= $
" * " $ !
& " $ !
/ & '
"
Wage, Value of Marginal Product of Labor
70
60
50 Wage
40
30
20
10 VMPL
1 2 3 4 5 6
Quantity of Labor
Supply
w1
Wage
w2
w1–$3
D1
D2
L2 L1
Quantity of Labor
/ %
$ $
" !
S1
S2
w1
Wage
w1–$3
w2
D1
D2
L1 L2
Quantity of Labor
D & ! "
$ & % " "
3
! $ '
%' $
" # $
%
*
%
)
-
% ' ,
% -
"
/01 % %
' % %
20"1
S2
S1
Wage
Wage
Demand Demand
Quantity Quantity
Supply
Wage
Wage
Demand Demand
, -+ "
-! +
%
""
# " "
"
, 2
" " "
" : !
. +. .
. +, ,
. . .
#. , ,
(. . #.
1,000
Wine
500
Cheese
c
Cheese
1,000
Wine
w*
c* 500
Cheese
Wine
w2
w1
BC1 BC2
c1 c2
Cheese
w2
Wine
w1
BC1 BC2
c2 c1
Cheese
1,000
w3 C
Wine
w1 A
w2 B
C2 C3 C1300 500
Cheese
: 8 " "
;"" 4 & "" " "
" " 4"
"" "" 0
1&
I1
I2
BC2 BC1
Coffee
A
B
I1
I2
BC2 BC1
Coffee
4" " " & "" 5
9 "" 5
0 1 9 0 9
" 17& "" 5
9
50
Milk
25
Cookies
BC1
Consumption
BC2
Leisure
BC1
Consumption
BC2
Leisure
Consumption
BC2
Leisure
BC1
Consumption
BC2
Leisure
BC3
Consumption
$800
BC2
$600
BC1
L8 L6 L10 100
Leisure
Leisure
BC2
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