The economics background investors need to interpret global economic news distilled to the essential elements: A tool of choice for investment decision-makers. Written by a distinguished academics and practitioners selected and guided by CFA Institute, the world's largest association of finance professionals, Economics for Investment Decision Makers is unique in presenting microeconomics and macroeconomics with relevance to investors and investment analysts constantly in mind. The selection of fundamental topics is comprehensive, while coverage of topics such as international trade, foreign exchange markets, and currency exchange rate forecasting reflects global perspectives of pressing investor importance. Concise, plain-English introduction useful to investors and investment analysts Relevant to security analysis, industry analysis, country analysis, portfolio management, and capital market strategy Understand economic news and what it means All concepts defined and simply explained, no prior background in economics assumed Abundant examples and illustrations Global markets perspective
Foreword Acknowledgments About the CFA Institute Investment Series Chapter 1 Demand and Supply Analysis: Introduction Learning Outcomes 1 Introduction 2 Types of Markets 3 Basic Principles and Concepts 3.1 The Demand Function and the Demand Curve 3.2 Changes in Demand vs. Movements along the Demand Curve 3.3 The Supply Function and the Supply Curve 3.4 Changes in Supply vs. Movements along the Supply Curve 3.5 Aggregating the Demand and Supply Functions 3.6 Market Equilibrium 3.7 The Market Mechanism: Iterating toward Equilibrium--or Not 3.8 Auctions as a Way to Find Equilibrium Price 3.9 Consumer Surplus--Value minus Expenditure 3.10 Producer Surplus--Revenue minus Variable Cost 3.11 Total Surplus--Total Value minus Total Variable Cost 3.12 Markets Maximize Society's Total Surplus 3.13 Market Interference: The Negative Impact on Total Surplus 4 Demand Elasticities 4.1 Own-Price Elasticity of Demand 4.2 Own-Price Elasticity of Demand: Impact on Total Expenditure 4.3 Income Elasticity of Demand: Normal and Inferior Goods 4.4 Cross-price Elasticity of Demand: Substitutes and Complements 4.5 Calculating Demand Elasticities from Demand Functions 5 Summary Practice Problems Chapter 2 Demand and Supply Analysis: Consumer Demand Learning Outcomes 1 Introduction 2 Consumer Theory: From Preferences to Demand Functions 3 Utility Theory: Modeling Preferences and Tastes 3.1 Axioms of the Theory of Consumer Choice 3.2 Representing the Preference of a Consumer: The Utility Function 3.3 Indifference Curves: The Graphical Portrayal of the Utility Function 3.4 Indifference Curve Maps 3.5 Gains from Voluntary Exchange: Creating Wealth through Trade 4 The Opportunity Set: Consumption, Production, and Investment Choice 4.1 The Budget Constraint 4.2 The Production Opportunity Set 4.3 The Investment Opportunity Set 5 Consumer Equilibrium: Maximizing Utility Subject to the Budget Constraint 5.1 Determining the Consumer's Equilibrium Bundle of Goods 5.2 Consumer Response to Changes in Income: Normal and Inferior Goods 5.3 How the Consumer Responds to Changes in Price 6 Revisiting the Consumer's Demand Function 6.1 Consumer's Demand Curve from Preferences and Budget Constraints 6.2 Substitution and Income Effects for a Normal Good 6.3 Income and Substitution Effects for an Inferior Good 6.4 Negative Income Effect Larger than Substitution Effect: Giffen Goods 6.5 Veblen Goods: Another Possibility for a Positively Sloped Demand Curve 7 Summary Practice Problems Chapter 3 Demand and Supply Analysis: The Firm Learning Outcomes 1 Introduction 2 Objectives of the Firm 2.1 Types of Profit Measures 2.2 Comparison of Profit Measures 3 Analysis of Revenue, Costs, and Profits 3.1 Profit Maximization 3.2 Productivity 4 Summary Practice Problems Chapter 4 The Firm and Market Structures Learning Outcomes 1 Introduction 2 Analysis of Market Structures 2.1 Economists' Four Types of Structure 2.2 Factors That Determine Market Structure 3 Perfect Competition 3.1 Demand Analysis in Perfectly Competitive Markets 3.2 Supply Analysis in Perfectly Competitive Markets 3.3 Optimal Price and Output in Perfectly Competitive Markets 3.4 Factors Affecting Long-Run Equilibrium in Perfectly Competitive Markets 4 Monopolistic Competition 4.1 Demand Analysis in Monopolistically Competitive Markets 4.2 Supply Analysis in Monopolistically Competitive Markets 4.3 Optimal Price and Output in Monopolistically Competitive Markets 4.4 Factors Affecting Long-Run Equilibrium in Monopolistically Competitive Markets 5 Oligopoly 5.1 Demand Analysis and Pricing Strategies in Oligopoly Markets 5.2 Supply Analysis in Oligopoly Markets 5.3 Optimal Price and Output in Oligopoly Markets 5.4 Factors Affecting Long-Run Equilibrium in Oligopoly Markets 6 Monopoly 6.1 Demand Analysis in Monopoly Markets 6.2 Supply Analysis in Monopoly Markets 6.3 Optimal Price and Output in Monopoly Markets 6.4 Price Discrimination
