Microeconomics and Public Policy

This essay provides a frame of reference for objective approaches to complex political and legal public policy environments typically found within a market-system context. In contrast to other economic systems, the market-system orientation of the United States' economy subscribes to and protects the notion of free enterprise. This essay covers two intertwined theories, microeconomic theory and public-interest theory of regulation. With its focus on firm and consumer behaviors, microeconomic theory encompasses production decisions and determinations of price, output, and profit levels and presents a foundation for crafting and analyzing public policies. Public-interest theory of regulation contends that the need for regulation arises in order to protect the consuming public from abuses by producers. Antirust, industrial, and social regulations demonstrate the value of microeconomic theory to public policy. The essay introduces an array of methods and ideologies that economic analysts employ.

Keywords Ceteris Paribus; Concentration Ratio; Conglomerate Merger; Demand Schedule; Demand; Economic Profit; Economic systems; Elastic; Externalities; Fixed Costs; Horizontal Merger; Inelastic; Law of Demand; Law of Supply; Marginal Revenue; Market Failure; Market system; Market; Microeconomic theory; Monopoly; Natural Monopoly; Normal Profit; Output; Perfect Competition; Predatory Pricing; Price; Price Controls; Price Elasticity of Demand; Price Fixing; Producers; Profit; Public interest theory of regulation; Public policy; Revenue; Supply; Variable Costs

Economics > Microeconomics & Public Policy

Overview

The information presented in this essay provides a frame of reference within which to describe the perpetual need for economists and other social scientists to lend objective mindsets to complex political and legal public-policy environments. Though this essay provides a foundation for developing future analysts and effective navigators who can moderate these environments, its main purpose is to help undergraduate students and other readers develop their knowledge of economic theory, demonstrate their understanding of its relevance to public policy, and apply their skills in serving the public interest. In general, this essay will generate a better understanding of the interdependent relationships between market economics, industrial and social regulation, and government policy. More specifically, it will convey information about the role of the federal government in encouraging industrial stability, protecting citizens' well-being, and maintaining competitive exchanges of goods, services, and scarce resources.

In contrast to a command- or a plan-based economic system, in which the government or a few powerful individuals determine the nature and scope of domestic economic activity, the market system that the United States operates is built upon the notion of free enterprise. Though some flaws exist in this system, its essence merely requires voluntary involvement between those who pay a price in exchange for goods and services that bring satisfaction and those who incur costs and earn profits while providing the goods and services that satisfy the other party's needs and wants. In other words, consumers and producers come together in product markets to exchange dollars for goods and vice versa. Those markets often vary to some extent in terms of the degree and nature of competition between and among producers. Perfect competition, as a reference point, is analogous to an auction-house scenario and is a natural element in a market-based system. In essence, the general intent of public policy in terms of microeconomics is to manage the level of competition. The government laws and policies covered in this essay include protecting vulnerable industries, moderating noncompetitive prices, and addressing market power.

This essay conveys the tenets of two intertwined theories. One is microeconomic theory, which will be discussed below in detail before we turn our attention to its applications to public policy. Public-interest theory of regulation presents the notion that industrial regulations protect the consuming public from abuses by producers who hold market power (McConnell & Brue, 2008). Market power usually occurs whenever a few firms are the dominant suppliers of a product, whether by design or by coincidence. Electric power, natural gas, and communication companies serve as examples of natural monopolies. Like any monopoly, market power accrues because rival firm entry is nearly impossible and profit maximization occurs at a low level of output, resulting in costs and prices that are higher relative to firms operating in highly competitive markets. Consistent with this theory, the imposition of regulations benefits consumers through reduced costs and higher outputs while allowing producers to cover production costs and earn a fair return. We will return to this perspective and its application, but first we need to cover microeconomic theory and gain an understanding of its relevance.

Microeconomic Theory: A Perspective on Markets, Behaviors, & Interventions

With its focus on firm and consumer behavior, microeconomic theory focuses partially on production decisions and price derivations. On the one hand, firm behavior analyses focus on production decisions and pricing, usually with an eye toward the type of market in which the firm supplies an item. Microeconomic theory also focuses on analyses of individual behavior and market demand for an item.

Microeconomic Assumptions

Studies in microeconomics usually begin by accepting a set of assumptions, which forms the parameters for additional inquiry.

• First and foremost is the ceteris paribus (all else is held constant) assumption.
• The second assumption is that consumers and producers behave as rational agents who have access to full, perfect information relevant to their decisions.
• A third assumption is that when those agents engage in transactions, no individual or group brings an inordinate amount of influence to an exchange decision.
• The fourth and last assumption of interest here is that item prices reflect only the direct private value of an exchange between a buyer and a seller; in other words, the system of exchange omits or ignores the indirect benefits or costs incurred by other members of larger society.

Problems arise in the marketplace when any of the last three assumptions become unrealistic or fail to hold true. Policy analysts and economists refer to such a situation as a market failure. Its occurrence may establish a rationale for governmental intervention, such as the formation and implementation of public policies; for more information on these and other concepts found in this essay, consult the economics dictionary as edited by Pearce (1992).

Supply & Demand

In addition to learning about market failures and public policies, students of microeconomics often begin by focusing their attention on relationships between the possible prices of an item, the quantities consumers are willing and able to purchase at each price, and the quantities suppliers are willing and able to produce.

Demand Side

On the consumer or demand side, an inverse relationship exists between price and quantity in accordance with the law of demand. Relatively speaking, smaller amounts are in demand at higher prices and vice versa.

Prices generally reflect an agreement between sellers and buyers, who exchange goods and services as they interact in the marketplace. Most sellers take the price dictated by market forces, and very few sellers are able to set the market price. In terms of demand, typically the higher the price for any item, the more sensitive consumer purchases become. Elasticity is a concept that measures consumer sensitivity to price hikes. Calculations of the price elasticity of demand allow economists to determine precisely, in percentage terms, how much a consumer's purchases of an item will decrease in response to an increase in its price. Guell (2007, p. 41) summarizes a few studies on the price elasticity of demand; for instance, the evidence with respect to airline travel informs us that any given 10 percent increase in the airfare will result in an 18 percent decrease in the number of tickets sold. Keep in mind that the ratio varies according to whether the travel is for business or leisure and that business travelers are less responsive to price hikes than leisure travelers. We will return to this concept and the questionable practice of segmenting a market according buyers' price elasticity of demand.

Supply Side

On the producer or supply side, a positive relationship exists according to the law of supply. The price at which producers can sell their goods and services is only one constraint. The relationship between market prices and producer costs often influences whether item production will occur. Firms incur a variety of costs in their production of goods and services. The following sections provide a short discussion and description of those costs and some direction regarding their applicability to public policy and analysis.

Costs

Total costs are the sum of fixed and variable costs. Fixed costs are those that exist even without any production and do not vary with the scale of production. Some examples of fixed costs are monthly fees paid for machinery, buildings, and land. Variable costs are those that vary with production. Some examples of variable costs are wages, materials, and supplies.

The allocation of costs across larger scales of production results in a variety of cost curve shapes. Graphs depicting these functions show cost on the vertical axis and quantity on the horizontal axis. Average total cost and average variable cost form important U-shaped curves. Their calculation involves dividing them by the production quantity. The lowest points on those curves are significant. At those points is where the marginal cost curve, which is J-shaped, intersects them. Marginal cost is the change in total costs that arises from producing one additional unit.

Revenue

Firms produce and sell items, and they receive a price for each one sold. Total revenue is the mathematical product of price times the quantity sold at each price. Marginal revenue is the change in total revenue that arises from selling one additional unit. Price is equal to marginal revenue in competitive market structures and greater than marginal revenue in monopolistic market structures. Though graphs can become quite confusing with each addition of a line or curve, keep in mind that the marginal revenue line is horizontal in perfectly competitive market structures and downward sloping in monopolistic structures.

A key relationship exists where marginal revenue equals marginal cost and where these two curves intersect. The intersection determines the profit-maximizing amount of output. Most, if not all, firms attempt to set production to that amount as they exhibit profit-maximizing behaviors. Now, let us bring prices back into the analysis for a short discussion of the rules of production. These rules help gauge whether a firm may continue its operation as a competitive, viable entity.

Rules of Production

To comply with the first of two rules, firms must produce at the profit-maximizing output, which is, again, where marginal revenue equals marginal cost. The second rule is that firms must receive a price that is equal to or greater than average variable cost. Their sales must cover, at the least, average variable costs and contribute something toward average fixed costs. In other words, they must cover their variable inputs, such as labor costs, and make payments on their plants and machinery. Moreover, they must operate at or above the shut-down point, which is where the marginal cost curve intersects the average variable cost curve, at the latter's lowest point.

Break-Even Point

Another key reference point is the break-even point. This point is where the marginal cost curve intersects the average total cost curve, at the latter's lowest point. The break-even point also marks the location at which those costs are equal and the firm earns a normal profit. The term is misleading, as it seems to indicate an absence of profit. However, profits become part of an operating cost if the owner is to be consistent with the notion of opportunity costs, which is the value the decision maker assigns to the best foregone alternative.

Market Structure

Depending on the market structures in which they operate, some firms can influence the market price, while others merely accept the market price for their outputs. Market structure reflects whether a firm makes the market price or takes the market price. Structures at the extreme ends of a continuum refer to the presence or the absence of competition in a market for a specific output or item. The bookends of that continuum are perfect competition and monopoly or imperfect competition. In addition to whether firms are price makers or price takers, market structure descriptors often include the number of sellers and buyers, the ease with which firms can enter or exit a market, and the level of profit.

Highly Competitive Market Structures

One example of a highly competitive market structure is agriculture. In this instance, there are numerous buyers and sellers of an agricultural product such as corn. Farmers usually take the price dictated by the market, and almost anyone can obtain enough resources to grow corn. In contrast, the production of computer-operating systems serves as an example of a noncompetitive market structure. In this instance, there are numerous buyers of the system but only a very few sellers. Microsoft and Apple are two firms that often come to mind with reference to operating systems for personal computers. Consequently, these system developers make the market price, as they are essentially the only producers, and virtually no one else can obtain the legal or intellectual resources required for producing and developing their software. Furthermore, these firms generate lower quantities and charge higher prices than perfect competitors would, due in part to their market power. Those prices are much higher than the break-even point, a tactic that provides monopolists with profit greater than the normal level. Economic profit accrues when prices are higher than average total cost, inviting new firm entry into a market. However, entry into the market for operating-system software as a producer is virtually impossible, mostly due to legal constraints such as licenses and patents.

Entry barriers and economic profit suggest the presence of market power. They also represent the existence of an inordinate influence in the marketplace that tends to favor the seller over the buyer. In response to market failures, governments may intervene by establishing price controls. These controls come in two forms: price ceilings and price floors. In an effort to protect an industry subject to intense competition, such as dairy farming, a price floor will prevent the price from falling below a specified amount, so that nobody can charge below a minimum price for products such as a gallon of milk or a pound of cheese. Conversely, in an effort to emulate a competitive situation, a price ceiling will prevent the price of a product, such as a unit of electricity or natural gas, from rising above a specific amount. Price controls are one application of public policy to microeconomics.

Applications

This section applies microeconomic theory to regulatory interventions. Forms of public policy covered in this essay are antitrust regulation, industrial regulation, and social regulation. The first two are interrelated in addressing product markets and constitute the first part of this section. The last part is more general in nature, addressing environmental concerns, product and worker safety, and some items straddling the resource and labor market. The common thread that weaves all these parts together is the role of government in maintaining competition, promoting industrial and societal stability, and providing a legal framework within which to conduct economic and policy analyses.

Antitrust & Industrial Regulations

These regulations serve to limit the amount of potential or actual market power held by a small number of firms. Price fixing and predatory pricing are illegal activities. In order to gain market power, two or more rival firms may conspire to fix the price of an item at a specific amount. This action effectively diminishes competitiveness between and among these firms, and it erodes the benefits consumers receive from paying a low price instead of a high price. Furthermore, the firms preserve their market share. Another illegal tactic to gain market power is when one rival firm temporarily lowers its price to below cost in order to force its competitor to lower its prices. In predatory pricing schemes, a few rounds of price cuts can force a competitor into a shut-down situation crafted through the actions by the predator firm. Once the rival exits the market, the surviving firm will gain share and market power, raising its price and realizing economic profit, especially when entry into the market is difficult.

Market-Structure Evaluation

One feature that defines market structure is whether entry into or exit from a market is easy or difficult. By way of review, additional features include the size of the producing or consuming population and the ability of a small number of firms to set prices. Competition may occur on the basis of price or through advertising that creates an image with which a buyer identifies or perceives as a dimension of quality. Soft-drink manufacturers are famous for concocting differences between their carbonated caramel-colored sweetened beverages through massive expenditures on advertising and marketing. In reality, the amount of product differentiation frequently masks the degree of competition. Sometimes the delineation of market power is in terms of the portion of total market sales held by the largest firms.

Monopolies/Oligopolies

Analysts have a set of measures available to them by which to estimate market power. Farthest from perfect competition on the market-structure continuum, a monopolist is one firm that supplies an item to an entire market. One step closer along that continuum is an oligopolistic market structure, oligo- meaning "few," in which a few firms sell most of the product. Two common measures of market power include the concentration ratio and the Herfindahl index (HI). Calculating the concentration ratio for the four largest firms (the CR4) involves dividing the dollar amount of their sales by the total dollar amount of market sales. For example, the CR4 in the soft-drink market could be somewhere around a 95, after multiplying the result by 100, meaning that the four largest firms sell 95 percent of the product in a given market. For a monopolist, the CR1 would be 100 percent, which is the maximum possible value of a concentration ratio. Calculating the HI involves squaring the market share of each firm in the market and adding them together; the maximum possible value, in the case of a monopolist, would be 10,000.

Monopolists face a downward-sloping market demand curve. Their prices usually place at the higher end of the curve, which is in the elastic region. Though this means that consumer purchases are responsive to changes in price, there is an absence of competitors who offer close substitutes for the good or service provided, partly due to significant barriers to entry. Furthermore, price discrimination, which is charging buyers different prices by segmenting them according to their individual price elasticities of demand, occurs when airlines impose restrictions on leisure travelers' fares, recognizing that their sensitivities to price are greater than those of business travelers, who usually require maximum flexibility in their travels. Moreover, the high price is the result of the profit-maximizing output being lower than it would be in other market structures. Usual monopoly behavior entails restricting output, which in turn forces prices upward, and generating unemployment and lower incomes because they produce less and employ fewer workers than do firms operating within other types of market structures. For these reasons, many economists, public-policy analysts, and other individuals consider monopolies bad for society.

Regulations of Monopolistic Behavior

Regulations and laws are enacted due to those unfavorable perceptions, analyses, or behaviors. Regulators typically concentrate on manipulating price-output combinations. The price controls imposed by regulators on natural monopolies such as utilities take one of two forms. First, regulators may pursue the socially optimal price, which is equal to marginal cost. This type of pricing generates the largest amount of output and the lowest price, which is characteristic of a perfectly competitive market structure. Second, regulators may pursue a fair return price, which is equal to average total cost. This pricing strategy forces firms to accept a normal profit, which eliminates any economic profit. The strategy also generates higher outputs and lower prices, but it provides a return on the capital investment. Utility providers usually depend on generators, transmission lines, and other equipment in supplying electric power and transporting natural gas. Both pricing schemes are consistent with the public-interest theory of regulation.

Several antitrust laws exist for controlling economic behaviors and monopolistic inclinations. The key pieces of federal legislation are the Sherman Act, the Clayton Act, the Federal Trade Commission Act, and the Celler-Kefauver Act. Some of these are instrumental in examining potential market power when firms propose to merge.

Concentration ratios and the HI as well as levels of profit, price, and output are useful in examining merger proposals. A vertical merger occurs when a firm buys one or more of its suppliers, such as when a soft-drink manufacturer buys an aluminum-can producer. A horizontal merger occurs when a firm buys a competitor, such as when a restaurant owner buys another restaurant. A conglomerate merger occurs when a firm buys another firm in a separate but related industry, such as when a soft-drink manufacturer buys a fast-food restaurant. Industrial and antitrust regulations focus on market power and define markets according to product and/or geographic location. They attempt to protect consumers from high prices and restricted choices while also pursuing stability for firms facing intense competition. For more detail regarding the latter, readers should consult chapters in microeconomics textbooks on farm policy, health-care policy, international trade policy, and labor markets.

Social Regulation

As McConnell and Brue (2008) point out, industrial regulation concerns itself with regulating rates or prices of natural monopolies. In contrast, social regulation is described as an emergent field that focuses on the conditions in which production occurs, the societal impact of production, and the physical attributes of outputs. In brief, this form of regulation deals with safety and environmental issues and employment practices.

Policy analysts in this domain of regulation generally must be skilled in examining the benefits and the costs associated with decisions. They tend to concern themselves with net benefits as they compare private gains against societal losses. These policy analysts use optimization analyses to determine whether marginal benefits are greater than or equal to marginal costs. At first glance, costs are usually easier to identify and quantify than are benefits. Nonetheless, the rewards may be a fair match given those challenges.

The same may be said for the areas that social regulation targets. As a backdrop, social regulation is more comprehensive than antitrust and industrial regulation. In addition, it addresses matters that affect consumers and producers on a daily basis. The growth of social regulation since its inception has generated numerous tasks and public agencies and continues to provide ample opportunities for economic analysts. Among the list of possible areas of study, as referenced in McConnell and Brue (2008, pp. 592–95), are the effectiveness of food, drugs, and cosmetics; industrial health and safety of workers and products; recruitment, promotion, and outplacement of human resources; cleanliness of air and water; and noise abatement. Additional opportunities may arise from reviewing the positions of those who defend or critique social-regulation policy and the articles listed as suggested reading.

In conclusion, this essay demonstrates the value of microeconomics to public policy and describes many concepts and terms relevant to public-policy analysis. It also extends an invitation to undergraduates to develop and refine their skill sets for possible service in an area of public policy, having introduced them to a limited array of methods and ideology of economists.

Terms & Concepts

Antitrust Policy: Legislation and analysis that focus on the growth of market power.

Ceteris Paribus: Latin meaning "all else is held constant."

Concentration Ratio: A metric that estimates the concentration of market power among a small number of firms.

Conglomerate Merger: Occurs when firm ownership expands across different industries and when firms buy their suppliers or competitors.

Demand: The amount of a good or service an individual consumer or group of consumers wants at a given price.

Demand Schedule: The actual quantities that consumers are willing and able to purchase at various prices.

Economic Profit: Realized when market price exceeds average total cost; invites rival firm entry into a market in the absence of barriers.

Elastic: When percentage change in supply or demand quantity is greater than percentage change in price or income.

Externalities: Spillovers from products and market transactions that can benefit or harm parties unrelated to or excluded from a transaction or exchange.

Fixed Costs: Costs for any level of production or output that remain constant.

Horizontal Merger: Occurs when firms buy their competitors.

Inelastic: When percentage change in supply or demand quantity is less than percentage change in price or income.

Law of Demand: Specifies the inverse or negative relationship that exists between an item's demand quantity and its price; quantity and price move in opposite directions.

Law of Supply: Specifies the direct or positive relationship that exists between an item's demand quantity and its price; quantity and price move in same direction.

Marginal Revenue: The contribution to total revenue from the sale of one additional item.

Market: A virtual space where consumers and producers interact while exchanging a specific item in accordance with their demand and supply schedules.

Market Failure: The result of information being imperfect or unavailable for consumer and producer decisions, of an individual or group holding and bringing a disproportionate amount of influence into a market transaction, or of an imposition of costs or harm on third parties and those outside the exchange or transaction.

Monopoly: When one firm is the sole supplier of a good or service within a market and can determine output level and price and prevent entry of new suppliers.

Normal Profit: The amount of profit considered enough for an owner to remain in business; occurs when price equals average total cost.

Natural Monopoly: Usually occurs in industries such as the supply of electric power, natural gas, or communications.

Output: The quantity of items or services produced by a firm or group of firms in a market.

Perfect Competition: The condition of a market in which several buyers and sellers exist but none of them can influence price, although entry and exit are easy to accomplish.

Predatory Pricing: The act of pricing items temporarily below cost to drive competitors out of business.

Price: The amount of money that is required to obtain an item.

Price Controls: Restrictions that prevent prices from rising above or falling below a specific amount.

Price Elasticity of Demand: The percentage change in an item's demand quantity divided by the percentage change in the item's price.

Price Fixing: The act of conspiring with competitors to establish prices, thus alleviating competition and preserving market share.

Producers: Firms that supply or provide goods or services desired by consumers.

Public-Interest Theory of Regulation: The perspective that government intervention maintains competition, promotes industrial stability, and protects consumers from abuses by firms holding market power.

Quantity Demanded: The amount of goods or services that consumers desire at given prices.

Quantity Supplied: The amount of goods or services that suppliers are willing and able to produce at given prices.

Revenue: The proceeds from the sale of an item; the mathematical product of the quantity of the item sold times the price of the item.

Supply: The amount of a good or service an individual producer or a group of producers will provide at a given price.

Supply Schedule: The actual quantities that producers are willing and able to purchase at various prices.

Variable Costs: Costs for production or output that vary according to activity level.

Bibliography

Apgar, W. C., and Brown, H. J. (1987). Microeconomics and Public Policy. Glenview, IL: Scot, Foresman and Co.

Arnold, Roger A. (2005). Economics(7th ed.) Mason, OH: Thomson South-Western.

Campos, R. G., Reggio, I., & García-Píriz, D. (2013). Micro versus macro consumption data: The cyclical properties of the Consumer Expenditure Survey. Applied Economics, 45, 3778–3785. Retrieved November 25, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=84221311&site=ehost-live

Guell, R. C. (2007). Issues in economics today(3rd ed.). Boston, MA: McGraw-Hill Irwin.

Haidar, J. (2011). A note on the social costs of monopoly and regulation. IUP Journal of Financial Economics, 9, 76–79. Retrieved November 25, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=78120188&site=ehost-live

McConnell, C. R. & Brue, S. L. (2008). Economics(17th ed.). Boston, MA: McGraw-Hill Irwin.

Pearce, D. W. (Ed.). (1992). The MIT dictionary of modern economics. (4th ed.). Cambridge, MA: MIT Press.

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Suggested Reading

Appelbaum, E. (1982). The estimation of the degree of oligopoly power. Journal of Econometrics, 19, 287-299.

Bariloche, R. (2011). A critical view of innovation in the context of poverty, unemployment and slow economic growth. Modern Economy, 2, 228–258. Retrieved November 25, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=73031688&site=ehost-live

Blank, R. (2002, Winter). What do economists have to contribute to policy decision-making? Quarterly Review of Economics & Finance, 42, 817. Retrieved September 21, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=8792083&site=ehost-live

Bonner, J. (1990). Microeconomics for public policy: Helping the invisible hand. Economic Journal, 100, 671-671. Retrieved September 20, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=17631357&site=ehost-live

Cheung, S. (2004). The microeconomics of public policy analysis (Book). Economic Journal, 114, F367-F368. Retrieved September 20, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=13229823&site=ehost-live

Chidmi, B., Lopez, R., & Cotterill, R. (2005). Retail oligopoly power, dairy compact, and Boston milk prices. Agribusiness, 21, 477-491. Retrieved September 20, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=18535011&site=ehost-live

Keating, B. (1997). Essential microeconomics for public policy analysis (Book). Social Science Quarterly (University of Texas Press), 78, 246-247. Retrieved September 20, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=9704101039&site=ehost-live

Kinoshita, J., Suzuki, N., Kawamura, T., Watanabe, Y., & Kaiser, H. (2001). Estimating own and cross price elasticities and price-cost margin ratios using store-level daily scanner data. Agribusiness: An International Journal, 17, 515-525. Retrieved September 27, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5933322&site=bsi-live

Lucas Jr., R., Krueger, A., & Blank, R. (2002). Promoting economic literacy: Panel discussion. American Economic Review, 92, 473-477. Retrieved September 20, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=6882089&site=ehost-live

Microeconomics for public policy: Helping the invisible hand. (1990). Journal of Economic Literature, 28, 125. Retrieved September 20, 2007, from EBSCO Online Database Business Source Premier. http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=9706096826&site=ehost-live

Zaleski, P., & Esposto, A. (2007, September). The Response to Market Power: Non-Profit Hospitals versus For-Profit Hospitals. Atlantic Economic Journal, 35, 315-325. Retrieved http://search.ebscohost.com/login.aspx?direct=true&db=buh&AN=26218268&site=ehost-live