Note continued: Why Rational Ignorance Matters -- Special Interests and the Incentive to Be Informed -- A Formula for Political Success: Diffuse Costs, Concentrate Benefits -- Voter Myopia and Political Business Cycles -- Two Cheers for Democracy -- The Median Voter Theorem -- Democracy and Nondemocracy -- Democracy and Famine -- Democracy and Growth -- Takeaway -- Chapter Review -- Work It Out -- ch. 21 Economics, Ethics, and Public Policy -- The Case for Exporting Pollution and Importing Kidneys -- Exploitation -- Meddlesome Preferences -- Fair and Equal Treatment -- Cultural Goods and Paternalism -- Poverty, Inequality, and the Distribution of Income -- Rawis's Maximin Principle -- Utilitarianism -- Robert Nozick's Entitlement Theory -- Who Counts? Immigration -- Economic Ethics -- Takeaway -- Chapter Review -- Work It Out -- ch. 22 Managing Incentives -- Lesson One: You Get What You Pay For -- Prisons for Profit? -- Piece Rates vs. Hourly Wages -- Lesson Two: Tie Pay to Performance to Reduce Risk -- Tournament Theory -- Improving Executive Compensation with Pay for Relative Performance -- Environment Risk and Availability Risk -- Tournaments and Grades -- Lesson Three: Money Isn't Everything -- Lesson Four: Nudges Can Work -- Takeaway -- Chapter Review -- Work It Out -- ch. 23 Stock Markets and Personal Finance -- Passive vs. Active Investing -- Why Is It Hard to Beat the Market? -- How to Really Pick Stocks, Seriously -- Diversify -- Avoid High Fees -- Compound Returns Build Wealth -- The No-Free-Lunch Principle, or No Return without Risk -- Other Benefits and Costs of Stock Markets -- Bubble, Bubble, Toil, and Trouble -- Takeaway -- Chapter Review -- Work It Out -- ch. 24 Asymmetric Information: Moral Hazard and Adverse Selection -- Moral Hazard -- Overcoming Moral Hazard by Providing More Information -- Overcoming Moral Hazard by Creating Better Incentives -- Adverse Selection -- Adverse Selection in Health Insurance -- Signaling as a Response to Asymmetric Information -- Signaling in the Job Market -- Signaling in Dating, Marriage, and the Animal Kingdom -- Is Signaling Good? -- Takeaway -- Chapter Review -- Work It Out -- ch. 25 Consumer Choice -- How to Compare Apples and Oranges -- The Demand Curve -- The Budget Constraint -- Preferences and Indifference Curves -- Optimization and Consumer Choices -- The Income and Substitution Effects -- Applications of Income and Substitution Effects -- Losing Your Ticket -- How Much Should Costco Charge for Membership? -- Labor Supply -- Labor Supply and Welfare Programs -- Takeaway -- Chapter Review -- Work It Out. Machine generated contents note: ch. 1 The Big Ideas -- Big Idea One: Incentives Matter -- Big Idea Two: Good Institutions Align Self-Interest with the Social Interest -- Big Idea Three: Trade-offs Are Everywhere -- Opportunity Cost -- Big Idea Four: Thinking on the Margin -- Big Idea Five: The Power of Trade -- Big Idea Six: The Importance of Wealth and Economic Growth -- Big Idea Seven: Institutions Matter -- Big Idea Eight: Economic Booms and Busts Cannot Be Avoided but Can Be Moderated -- Big Idea Nine: Prices Rise When the Government Prints Too Much Money -- Big Idea Ten: Central Banking Is a Hard Job -- The Biggest Idea of All: Economics Is Fun -- Chapter Review -- ch. 2 The Power of Trade and Comparative Advantage -- Trade and Preferences -- Specialization, Productivity, and the Division of Knowledge -- Comparative Advantage -- The Production Possibility Frontier -- Opportunity Costs and Comparative Advantage -- Comparative Advantage and Wages -- Adam Smith on Trade -- Trade and Globalization -- Takeaway -- Chapter Review -- Work It Out -- ch. 3 Supply and Demand -- The Demand Curve for Oil -- Consumer Surplus -- What Shifts the Demand Curve? -- Important Demand Shifters -- Produce Surplus -- What Shifts the Supply Curve? -- Important Supply Shifters -- Takeaway -- Chapter Review -- Work It Out -- ch. 4 Equilibrium: How Supply and Demand Determine Prices -- Equilibrium and the Adjustment Process -- Who Competes with Whom? -- A Free Market Maximizes Producer Plus Consumer Surplus (the Gain from Trade) -- Does the Model Work? Evidence from the Laboratory -- Shifting Demand and Supply Curves -- Terminology: Demand Compared with Quantity Demanded and Supply Compared with Quantity Supplied -- Understanding the Price of Oil -- Takeaway -- Chapter Review -- Work It Out -- ch. 5 Elasticity and Its Applications -- The Elasticity of Demand -- Determinants of the Elasticity of Demand -- Calculating the Elasticity of Demand -- Total Revenues and the Elasticity of Demand -- Applications of Demand Elasticity -- How American Farmers Have Worked Themselves Out of a Job -- Why the War on Drugs Is Hard to Win -- The Elasticity of Supply -- Determinants of the Elasticity of Supply -- Calculating the Elasticity of Supply -- Applications of Supply Elasticity -- Gun Buyback Programs -- The Economics of Slave Redemption -- Using Elasticities for Quick Predictions (Optional) -- How Much Would the Price of Oil Fall if the Arctic National Wildlife Refuge Were Opened Up for Drilling? -- Takeaway -- Chapter Review -- Work It Out -- Chapter 5 Appendix 1: Other Types of Elasticities -- Chapter 5 Appendix 2: Using Excel to Calculate Elasticities -- ch. 6 Taxes and Subsidies -- Commodity Taxes -- Who Ultimately Pays the Tax Does Not Depend on Who Writes the Check -- Who Ultimately Pays the Tax Depends on the Relative Elasticities of Supply and Demand -- The Wedge Shortcut -- Health Insurance Mandates and Tax Analysis -- Who Pays the Cigarette Tax? -- A Commodity Tax Raises Revenue and Creates a Deadweight Loss (Reduces the Gains from Trade) -- Elasticity and Deadweight Loss -- Subsidies -- King Cotton and the Deadweight Loss of Water Subsidies -- Wage Subsidies -- Takeaway -- Chapter Review -- Work It Out -- ch. 7 The Price System: Signals, Speculation, and Prediction -- Markets Link the World -- Markets Link to One Another -- From Oil to Candy Bars and Brick Driveways -- Solving the Great Economic Problem -- A Price Is a Signal Wrapped Up in an Incentive -- Speculation -- Signal Watching -- Prediction Markets -- Takeaway -- Chapter Review -- Work It Out -- ch. 8 Price Ceilings and Floors -- Price Ceilings -- Shortages -- Reductions in Quality -- Wasteful Lines and Other Search Costs -- Lost Gains from Trade (Deadweight Loss) -- Misallocation of Resources -- The End of Price Ceilings -- Rent Controls (Optional Section) -- Shortages -- Reductions in Product Quality -- Wasteful Lines, Search Costs, and Lost Gains from Trade -- Misallocation of Resources -- Rent Regulation -- Arguments for Price Ceilings -- Universal Price Controls -- Price Floors -- Surpluses -- Lost Gains from Trade (Deadweight Loss) -- Wasteful Increases in Quality -- The Misallocation of Resources -- Takeaway -- Chapter Review -- Work It Out -- ch. 9 International Trade -- Analyzing Trade with Supply and Demand -- Analyzing Tariffs with Demand and Supply -- The Costs of Protectionism -- Winners and Losers from Trade -- Arguments Against International Trade -- Trade and Jobs -- Child Labor -- Trade and National Security -- Key Industries -- Strategic Trade Protectionism -- Takeaway -- Chapter Review -- Work It Out -- ch. 10 Externalities: When the Price Is Not Right -- External Costs, External Benefits, and Efficiency -- External Costs -- External Benefits -- Private Solutions to Externality Problems -- Government Solutions to Externality Problems -- Command and Control -- Tradable Allowances -- Comparing Tradable Allowances and Pigouvian Taxes[—]Advanced Material -- Takeaway -- Chapter Review -- Work It Out -- ch. 11 Costs and Profit Maximization Under Competition -- What Price to Set? -- What Quantity to Produce? -- Don't Forget: Opportunity Costs! -- Maximizing Profit -- Profits and the Average Cost Curve -- Entry, Exit, and Shutdown Decisions -- The Short-Run Shutdown Decision -- Entry and Exit with Uncertainty and Sunk Costs -- Entry, Exi