Basic Microeconomics
                              Adapted from the original work
                        by Professor R. Larry Reynolds, PhD
                                     Boise State University
                                 Publication date: May 2011
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                                           ISBN-13: 978-1461175810
                                             ISBN-10:146117581X
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            Textbook Provenance (2004 - 2011)
            2004-2007  Editions
            Basic Microeconomics (http://www.boisestate.edu/econ/lreynol/web/Micro.htm) by 
            Professor R. Larry Reynolds, Boise State University.  Released under Creative 
            Commons license (CC-BY) April 2010 by R. Larry Reynolds.
            2011 Editions (http://opencollegetextbooks.org)
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            content changes were made to original version.  Textbook Equity added a table of 
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                    Table of Contents
         1 Introduction to Microeconomics.......................................................8
          1.1 Economics as a Study of Provisioning..............................................................9
          1.2 Economics as a Study of the Allocation of Scarce Resources........................10
          1.3 Social Science and Economics........................................................................10
           1.3.1 Role of Individual in the Community.......................................................11
           1.3.2 Cooperation, Competition and Conscription..........................................12
           1.3.3 The Nature of an Economic System and Processes within a System.....14
           1.3.4 Social Interaction and Technology..........................................................15
          1.4 The Problem of Provisioning..........................................................................16
           1.4.1 Social Interaction......................................................................................17
           1.4.2 Economic Activities..................................................................................21
         2 The Problem of Provisioning...........................................................25
          2.1 Introduction....................................................................................................25
          2.2 Social Interaction............................................................................................26
          2.3 Specialization..................................................................................................26
          2.4 Division of Labor............................................................................................28
          2.5 Coordination of Efforts...................................................................................29
          2.6 Economic Activities........................................................................................30
           2.6.1 Production...............................................................................................30
           2.6.2 Distribution.............................................................................................31
           2.6.3 Consumption...........................................................................................32
           2.6.4 Coordination, Competition and Cooperation........................................33
          2.7 Technology......................................................................................................34
          2.8 Economic Decisions........................................................................................37
           2.8.1 Rules ........................................................................................................37
           2.8.2 Intuition..................................................................................................38
           2.8.3 Reason and Rational Behavior...............................................................38
           2.8.4 Information.............................................................................................38
           2.8.5 Rationality and Information..................................................................40
         3 Introduction to Ways of Knowing....................................................41
          3.1 Facts, Information, Knowledge and Wisdom................................................42
          3.2 Hypotheses, Theories, Laws and Models.......................................................43
          3.3 Foundations of “Science”................................................................................45
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       3.4 Explanation, Prediction and Storytelling .....................................................50
       3.5 Logic.................................................................................................................51
        3.5.1 Deductive Reasoning...............................................................................52
        3.5.2 Inductive Reasoning................................................................................52
        3.5.3 Abductive Reasoning...............................................................................53
       3.6 Epistemology and Economic Methodology...................................................53
        3.6.1 A Taxonomy of Knowledge......................................................................54
        3.6.2 Brief Survey of Epistemology.................................................................56
        3.6.3 Milton Friedman.....................................................................................59
        3.6.4 Deirdre McCloskey..................................................................................60
       3.7 Which Methodology is “Correct?”..................................................................63
       3.8 The Standard View of the Scientific Method.................................................64
      4 Individuals and Community............................................................65
       4.1 Institutions......................................................................................................66
       4.2 Institutions and Costs....................................................................................68
       4.3 Morality, Justice and a Stable Society............................................................71
       4.4 Agents..............................................................................................................74
       4.5 Organizations and Agents...............................................................................76
       4.6 Objectives........................................................................................................77
       4.7 Economic objectives........................................................................................79
      5 Criteria for Evaluation.....................................................................81
       5.1 Criteria to Evaluate Ends and Means.............................................................82
       5.2 Ethics...............................................................................................................82
       5.3 Efficiency ........................................................................................................85
        5.3.1 Technical Efficiency.................................................................................87
        5.3.2 Production Possibilities Function...........................................................87
        5.3.3 Pareto Efficiency.....................................................................................96
        5.3.4 Some practical ethics.............................................................................103
        5.3.5 Efficiency and ethics (again!)................................................................104
      6 Introduction to the Rules of the Game and Economics Systems....106
       6.1 Economic Systems.........................................................................................106
        6.1.1 Traditional Economies...........................................................................107
        6.1.2 Command Economies............................................................................110
        6.1.3 Market.....................................................................................................113
        6.1.4 Role of Government...............................................................................116
        6.1.5 Property Rights.......................................................................................117
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