Negative income tax, 769
Negative relationship, 37
Net exports,108 –109
Net present value,240 –241
Network externality
definition, 740
monopolies and, 572
New classical macroeconom-
ics,351, 356
New Jersey clam licenses, 92
New Keynesian economics,
352, 356
New York City
banks, 254
rent control, 78–82
taxicabs, 88–93
New York Clearinghouse, 254
New York Times,75, 80
Newsprint, input price changes,
62–63
Nigeria, economic growth,
378–381
Nike, 416
Nixon, Richard, 351
Nominal exchange rate,
423–426, 429
Nominal gross domestic prod-
uct (GDP),114, 116
Nominal interest rate,138,
282
Nominal money supply, 322
Nominal wage,180, 183–185,
187
Nonaccelerating inflation
rate of unemployment
(NAIRU),336–337
Noncooperative behavior,
640–641
Noncooperative equilibrium,
646
Nonexcludable,743 –744
Nonlinear curve,slope of,
39–40
Nonlinear relationship, 36
Nonprice competition, 656
Nonrival in consumption, 744
Normal goods,53, 460, 476
Normal profit,533–534
Normative economics,6–8
North Korea, counterfeiting,
221
Nuclear power, 392
Numerical graphs
bar graph, 43
scatter diagram, 42–43
time-series, 42
O
Obama, Barack, 206, 260
Oil
consumption, U.S., 391
crude versusgas, 63
Middle East, 378
prices, 182–183, 190, 193,
197, 334
real price of, 389–390
Oligopolist, 573
Oligopoly, 573
collusion and competition,
640–641
determination of, 573–574
duopoly example, 638–640
importance of, 656
legal framework, 652–653
price competition versus
quantity competition,
641–642
product differentiation, price
leadership and,
655–656
tacit collusion, price wars
and, 653–655
OPEC (Organization of
Petroleum Exporting
Countries), 197,
639–640
OPEC I, II, 197
Open economy
balance of payments,
408–413
capital flows, 408–417
exchange rate regimes,
429–432, 435–439
foreign exchange rate,
419–427
macroeconomic policy,
exchange rates,
435–439
Open Market Desk, 273, 307
Open-economy macroeconom-
ics, 407
Open-market operation,255,
264–266
Opportunity cost,4–5,
19–20, 532
holding money, 268–270
quantity control, 91
trade, 25
Optimal consumption,
519–521
Optimal consumption
bundle,515 –517
Optimal consumption rule,
520
Optimal output rule,
536–537, 584–585
Ordinary goods, 795
Organ transplant, consumer
surplus and, 488
Organization of Petroleum
Exporting Countries
(OPEC), 197, 639–640
Origin, 35
Other things equal (ceteris
paribus)assumption,
14
Outflows, 223
Output,12, 315 –319. See also
Actual output; Aggregate
output; Potential output
Output gap, 196
monetary policy, 311unemployment rate,
328–329
Output per worker, 370
Overuse,749–750P
Panic of 1907, 253–254
Patent, 572
Payoff, 644
Payoff matrix, 644
Pearl Harbor, 346
Pension fund, 228
Perfect competition, 567
changing fixed cost, 595
conditions for, 569–570
definition of, 568–569
free entry and exit, 570
graphs, interpretation of,
590–596
industry supply curve and,
599–605
labor market and, 700–703
versusmonopolistic competi-
tion, 663–665
versusmonopoly, 613
product market and, 700
production and profits,
584–588, 595–596
profitability, market price
and, 590–592
short-run production deci-
sion, 592–593
shut-down price, 593–595
standardized product,
569–570
Perfect price discrimination,
627–629
Perfectly competitive
industry, 569
Perfectly competitive mar-
ket,180–181, 568–569
Perfectly elastic,467–468
Perfectly elastic supply, 479
Perfectly inelastic,466–467
Perfectly inelastic supply,
478
Permanent income hypothesis,
166
Persistent surplus, 128
Peso, exchange rate, 423–426
Phelps, Edmund, 333, 350
Phillips, Alban W. H., 331
Phillips curve
long-run, 335–336
short-run, 331–335
Physical asset, 224
Physical capital,222, 680
aggregate demand curve, 176
aggregate production func-
tion, 374–378
diminishing returns to,
374 –377
government, 387–388
growth rates, 385–386
productivity, 371
Pie chart, 43Pigouvian subsidy, 738
Pigouvian taxes, 734
Pin-making, specialization and,
23
Planned investment
spending,166 –167
Political business cycle, 351
Poll tax, 508
Pollution, economic growth
and, 390–393
Pollution, economics of
cost and benefits of,
724–725
external cost, 726–727
inefficiency of, 727–728
private solutions to, 728–729
Pollution, policies and, 731
cap and trade system, 736
emissions taxes, 732–734
environmental standards,
731–732
tradable emissions permists,
734–736
Poole, Bill, 295
Portugal, inflation, 101, 112
Positive demand shock,
194 –195
Positive economic profit, 533
Positive economics,6–8
Positive externalities, 727
Positive relationship, 37
Positive supply shock. See
Supply shock
Post-it note, productivity and,
371
Post-tax, 500
Potential output,185 –187
versusactual output, 186
output gap, 196
recessionary gap, 196
self-correcting, 195–196, 199
supply-side economics, 357
United States, 397
Pound (British currency), 435,
439
Poverty, 761
causes of, 763
consequences of, 763–764
demographics of, 762
trends in, 761–762
U.S. antipoverty programs,
768 –771
Poverty rate,761–762
Poverty threshold, 761
PPC (production possibili-
ties curve),16 –21,
24 –25
PPI (producer price index),
143, 145 –146
Preferences, demand curve, 54
Prescott, Edward, 353
Present value,237–241
Pre-tax, 500
Price ceilings,77–82
apartment market, 78–82
black markets, 81INDEX I-9