ECONOMICS
Nineteenth Edition
PAUL A. SAMUELSON
Institute Professor Emeritus
Massachusetts Institute of Technology
WILLIAM D. NORDHAUS
Sterling Professor of Economics
Yale University
sam11290_fm.indd iii 2/25/09 7:09:53 PM
, ABOUT THE AUTHORS
PAUL A. SAMUELSON, founder of the WILLIAM D. NORDHAUS is one of
renowned MIT graduate department of economics, America’s eminent economists. Born in Albuquer-
was trained at the University of Chicago and Harvard. que, New Mexico, he received his B.A. from Yale and
His many scientific writings brought him world fame his Ph.D. in economics at MIT. He is Sterling Profes-
at a young age, and in 1970 he was the first American sor of Economics at Yale University and on the staff
to receive a Nobel Prize in economics. One of those of the Cowles Foundation for Research in Economics
rare scientists who can communicate with the lay and the National Bureau of Economic Research. His
public, Professor Samuelson wrote an economics col- research has spanned much of economics—including
umn for Newsweek for many years and was economic the environment, energy, technological change, eco-
adviser to President John F. Kennedy. He testifies nomic growth, and trends in profits and productivity.
often before Congress and serves as academic con- In addition, Professor Nordhaus takes a keen inter-
sultant to the Federal Reserve, the U.S. Treasury, and est in economic policy. He served as a member of
various private, nonprofit organizations. Professor President Carter’s Council of Economic Advisers
Samuelson, between researches at MIT and tennis from 1977 to 1979, serves on many government advi-
games, is a visiting professor at New York University. sory boards and committees, and writes occasionally
His six children (including triplet boys) have con- for The New York Review of Books and other periodi-
tributed 15 grandchildren. cals. He regularly teaches the Principles of Econom-
ics course at Yale. Professor Nordhaus lives in New
Haven, Connecticut, with his wife, Barbara. When
not writing or teaching, he devotes his time to music,
travel, skiing, and family.
sam11290_fm.indd ii 2/25/09 7:09:36 PM
, To our families, students, and colleagues
ECONOMICS
Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue
of the Americas, New York, NY, 10020. Copyright © 2010, 2005, 2001, 1998, 1995, 1992, 1989, 1985,
1980, 1976, 1973, 1970, 1967, 1964, 1961, 1958, 1955, 1951, 1948 by The McGraw-Hill Companies,
Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or
by any means, or stored in a database or retrieval system, without the prior written consent of The
McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage
or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers
outside the United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 0 WCK / WCK 0 9
ISBN 978-0-07-351129-0
MHID 0-07-351129-3
Publisher: Douglas Reiner
Developmental editor II: Karen L. Fisher
Editorial coordinator: Noelle Fox
Senior marketing manager: Jen Lambert
Senior project manager: Susanne Riedell
Full-service project manager: Lori Hazzard, Macmillan Publishing Solutions
Lead production supervisor: Michael R. McCormick
Lead designer: Matthew Baldwin
Media project manager: Balaji Sundararaman, Hurix Systems Pvt. Ltd.
Cover image: The globes on the front and back covers are courtesy of the GEcon Project, Yale University, and were
created by Xi Chen and William Nordhaus. The height of the bars is proportional to output in each location. For
more details on the data and methods, go to gecon.yale.edu.
Typeface: 10/12 New Baskerville
Compositor: Macmillan Publishing Solutions
Printer: Quebecor World Versailles Inc.
Library of Congress Cataloging-in-Publication Data
Samuelson, Paul Anthony, 1915-
Economics / Paul A. Samuelson, William D. Nordhaus. — 19th ed.
p. cm.—(The McGraw-Hill series economics)
Includes index.
ISBN-13: 978-0-07-351129-0 (alk. paper)
ISBN-10: 0-07-351129-3 (alk. paper)
1. Economics. I. Nordhaus, William D. II. Title.
HB171.5.S25 2010
330—dc22
2009003178
www.mhhe.com
sam11290_fm.indd iv 2/25/09 7:09:53 PM
, Contents in Brief
A Centrist Proclamation xvi
Preface xviii
For the Student: Economics and the Internet xxiii
PART ONE BASIC CONCEPTS 1
Chapter 1 The Central Concepts of Economics 3
Appendix 1 How to Read Graphs 18
Chapter 2 The Modern Mixed Economy 25
Chapter 3 Basic Elements of Supply and Demand 45
PART TWO MICROECONOMICS: SUPPLY, DEMAND, AND
PRODUCT MARKETS 63
Chapter 4 Supply and Demand: Elasticity and Applications 65
Chapter 5 Demand and Consumer Behavior 84
Appendix 5 Geometrical Analysis of Consumer Equilibrium 101
Chapter 6 Production and Business Organization 107
Chapter 7 Analysis of Costs 126
Appendix 7 Production, Cost Theory, and Decisions of the Firm 144
Chapter 8 Analysis of Perfectly Competitive Markets 149
Chapter 9 Imperfect Competition and Monopoly 169
Chapter 10 Competition among the Few 187
Chapter 11 Economics of Uncertainty 211
PART THREE FACTOR MARKETS: LABOR, LAND, AND CAPITAL 227
Chapter 12 How Markets Determine Incomes 229
Chapter 13 The Labor Market 248
Chapter 14 Land, Natural Resources, and the Environment 267
Chapter 15 Capital, Interest, and Profits 283
v
sam11290_fm.indd v 2/25/09 7:09:54 PM
Nineteenth Edition
PAUL A. SAMUELSON
Institute Professor Emeritus
Massachusetts Institute of Technology
WILLIAM D. NORDHAUS
Sterling Professor of Economics
Yale University
sam11290_fm.indd iii 2/25/09 7:09:53 PM
, ABOUT THE AUTHORS
PAUL A. SAMUELSON, founder of the WILLIAM D. NORDHAUS is one of
renowned MIT graduate department of economics, America’s eminent economists. Born in Albuquer-
was trained at the University of Chicago and Harvard. que, New Mexico, he received his B.A. from Yale and
His many scientific writings brought him world fame his Ph.D. in economics at MIT. He is Sterling Profes-
at a young age, and in 1970 he was the first American sor of Economics at Yale University and on the staff
to receive a Nobel Prize in economics. One of those of the Cowles Foundation for Research in Economics
rare scientists who can communicate with the lay and the National Bureau of Economic Research. His
public, Professor Samuelson wrote an economics col- research has spanned much of economics—including
umn for Newsweek for many years and was economic the environment, energy, technological change, eco-
adviser to President John F. Kennedy. He testifies nomic growth, and trends in profits and productivity.
often before Congress and serves as academic con- In addition, Professor Nordhaus takes a keen inter-
sultant to the Federal Reserve, the U.S. Treasury, and est in economic policy. He served as a member of
various private, nonprofit organizations. Professor President Carter’s Council of Economic Advisers
Samuelson, between researches at MIT and tennis from 1977 to 1979, serves on many government advi-
games, is a visiting professor at New York University. sory boards and committees, and writes occasionally
His six children (including triplet boys) have con- for The New York Review of Books and other periodi-
tributed 15 grandchildren. cals. He regularly teaches the Principles of Econom-
ics course at Yale. Professor Nordhaus lives in New
Haven, Connecticut, with his wife, Barbara. When
not writing or teaching, he devotes his time to music,
travel, skiing, and family.
sam11290_fm.indd ii 2/25/09 7:09:36 PM
, To our families, students, and colleagues
ECONOMICS
Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue
of the Americas, New York, NY, 10020. Copyright © 2010, 2005, 2001, 1998, 1995, 1992, 1989, 1985,
1980, 1976, 1973, 1970, 1967, 1964, 1961, 1958, 1955, 1951, 1948 by The McGraw-Hill Companies,
Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or
by any means, or stored in a database or retrieval system, without the prior written consent of The
McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage
or transmission, or broadcast for distance learning.
Some ancillaries, including electronic and print components, may not be available to customers
outside the United States.
This book is printed on acid-free paper.
1 2 3 4 5 6 7 8 9 0 WCK / WCK 0 9
ISBN 978-0-07-351129-0
MHID 0-07-351129-3
Publisher: Douglas Reiner
Developmental editor II: Karen L. Fisher
Editorial coordinator: Noelle Fox
Senior marketing manager: Jen Lambert
Senior project manager: Susanne Riedell
Full-service project manager: Lori Hazzard, Macmillan Publishing Solutions
Lead production supervisor: Michael R. McCormick
Lead designer: Matthew Baldwin
Media project manager: Balaji Sundararaman, Hurix Systems Pvt. Ltd.
Cover image: The globes on the front and back covers are courtesy of the GEcon Project, Yale University, and were
created by Xi Chen and William Nordhaus. The height of the bars is proportional to output in each location. For
more details on the data and methods, go to gecon.yale.edu.
Typeface: 10/12 New Baskerville
Compositor: Macmillan Publishing Solutions
Printer: Quebecor World Versailles Inc.
Library of Congress Cataloging-in-Publication Data
Samuelson, Paul Anthony, 1915-
Economics / Paul A. Samuelson, William D. Nordhaus. — 19th ed.
p. cm.—(The McGraw-Hill series economics)
Includes index.
ISBN-13: 978-0-07-351129-0 (alk. paper)
ISBN-10: 0-07-351129-3 (alk. paper)
1. Economics. I. Nordhaus, William D. II. Title.
HB171.5.S25 2010
330—dc22
2009003178
www.mhhe.com
sam11290_fm.indd iv 2/25/09 7:09:53 PM
, Contents in Brief
A Centrist Proclamation xvi
Preface xviii
For the Student: Economics and the Internet xxiii
PART ONE BASIC CONCEPTS 1
Chapter 1 The Central Concepts of Economics 3
Appendix 1 How to Read Graphs 18
Chapter 2 The Modern Mixed Economy 25
Chapter 3 Basic Elements of Supply and Demand 45
PART TWO MICROECONOMICS: SUPPLY, DEMAND, AND
PRODUCT MARKETS 63
Chapter 4 Supply and Demand: Elasticity and Applications 65
Chapter 5 Demand and Consumer Behavior 84
Appendix 5 Geometrical Analysis of Consumer Equilibrium 101
Chapter 6 Production and Business Organization 107
Chapter 7 Analysis of Costs 126
Appendix 7 Production, Cost Theory, and Decisions of the Firm 144
Chapter 8 Analysis of Perfectly Competitive Markets 149
Chapter 9 Imperfect Competition and Monopoly 169
Chapter 10 Competition among the Few 187
Chapter 11 Economics of Uncertainty 211
PART THREE FACTOR MARKETS: LABOR, LAND, AND CAPITAL 227
Chapter 12 How Markets Determine Incomes 229
Chapter 13 The Labor Market 248
Chapter 14 Land, Natural Resources, and the Environment 267
Chapter 15 Capital, Interest, and Profits 283
v
sam11290_fm.indd v 2/25/09 7:09:54 PM
