Microeconomics: Study Guide
counterparts to all graphs in
the chapters of Gwartney, Stroup, Sobel, and Macpherson Economics
accessed below. For each chapter we provide an Excel
workbook and a set
of questions to guide users through the worksheets. The study guides are
documents. The links to the individual workbooks and associated
assignment sheets follow the chapter overviews below. Click on the chapter
number here to move to the relevant part of this page: 1 3 4 17 18 20 23 24 25 26 27
A similar set of exercises based on chapters from
, is available here
This material follows the text
quite closely, using Excel workbooks to illustrate the graphical analysis that
the text develops.
Chapter 3. Supply, Demand, and the Market
The Study Guide covers three related topics:
Demand, Supply, and Market Equilibrium. Each of those topics is treated in a
This workbook examines demand. It develops the
concepts of the demand curve and consumer surplus. It examines the distinction
between a change in demand and a change in the quantity demanded. It shows the
distinction between an elastic demand curve and an inelastic demand curve.
Finally, it examines some of the factors that shift a demand curve.
This workbook examines supply. It develops the
concepts of the supply curve and producer surplus. It examines the distinction
between a change in supply and a change in the quantity supplied. It shows the
distinction between an elastic supply curve and an inelastic supply curve.
Finally, it examines some of the factors that shift a supply curve.
This workbook examines market equilibrium. It
shows how markets can result in an efficient quantity of a good being produced.
It also examines the effect of changes in demand and supply on market
Chapter 4. Supply and Demand: Applications
This chapter extends the analysis of markets to
consider the relationship between product markets and markets for resources used
to produce those goods or services. It examines the market for loanable funds
where the "price" is the interest rate, and the market for foreign exchange. It
also examines the effects of policies designed to keep the price above or below
the price that would result in market equilibrium. Finally, it applies the
analysis to the impact of taxes.
Chapter 5. The Economic Role of
This chapter examines the economic roles played by
government. Two of these roles are to address concerns in which markets lead to
quantities that are not efficient, as defined in Chapter 3. One reason is less
than perfect competition--"rigged" markets. The other is the existence of
external costs or external benefits associated with the production and
consumption of some goods.
Chapter 17. Gaining from International
Shows gains from exchange, based on the principle
of Comparative Advantage. Shows gains and losses in specific domestic industries
when those industries are open to international trade. Demonstrates the effects
of imposing tariffs and quotas--who loses, who gains, and the reasons for a
Chapter 18. International Finance and the
Foreign Exchange Market
Uses the demand/supply framework to analyze
aspects of the market for foreign currencies.
Chapter 20. Costs and the Supply of
Shows how a firm's cost relates to its output.
Begins with an overview of types of cost--fixed and variable. Introduces the
production function, from which costs are derived. Develops the following
cost-curve relations: total cost, total variable cost; average total cost,
average variable cost, marginal cost, average fixed cost.
Chapter 21. Price Takers and the Competitive
Shows how price taking firms act in order to
maximize profits, and how firms' behavior relates to that of the market in
which the firms are located. Uses cost information (especially marginal cost) to
develop the reasoning behind a price-taking firm's supply curve. Analyzes the
connection between the firm and market in the short run and in the long run,
thus developing the logic of the short-run and long-run industry supply
Chapter 22. Price-Searcher Markets with Low
Shows how price-searching (aka, price-making)
firms act in order to maximize profits. Develops the concept of marginal revenue
and shows how marginal revenue and marginal cost define the profit-maximizing
output level. Develops the implications of free entry and exit (low barriers to
entry). Introduces price discrimination.
Chapter 23. Price-Searcher Markets with High
Chapter 24. The Supply of and Demand for
Chapter 25. Earnings, Productivity, and the
Chapter 26. Investment, the Capital Market,
and the Wealth of Nations
Chapter 27. Income Inequality and