VICE PRESIDENT & PUBLISHER George Hoffman
EXECUTIVE EDITOR Joel Hollenbeck
CONTENT EDITOR Jennifer Manias
SENIOR EDITORIAL ASSISTANT Erica Horowitz
ASSOCIATE DIRECTOR OF MARKETING Amy Scholz
SENIOR MARKETING MANAGER Jesse Cruz
MARKETING ASSISTANT Justine Kay
EDITORIAL OPERATIONS MANAGER Yana Mermel
PRODUCT DESIGNER Allison Morris
SENIOR MEDIA SPECIALIST Elena Santa Maria
SENIOR PRODUCTION AND MANUFACTURING MANAGER Janis Soo
ASSOCIATE PRODUCTION MANAGER Joel Balbin
PHOTO DEPARTMENT MANAGER Hilary Newman
DESIGN DIRECTOR Harry Nolan
COVER DESIGNER Maureen Eide
COVER PHOTO CREDIT Marilynne Bradley, artist
Application, Up For Debate, Test Your Understanding, and Critical Thinking icons ©istockphotos.com.
This book was set in Times Roman by Aptara®, Inc. and printed and bound by RR Donnelley.
The cover was printed by RR Donnelley.
This book is printed on acid free paper. ∞
Founded in 1807, John Wiley & Sons, Inc. has been a valued source of knowledge and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Our company is built on a foundation of principles that include responsibility to the communities we serve and where we live and work. In 2008, we launched a Corporate Citizenship Initiative, a global effort to address the environmental, social, economic, and ethical challenges we face in our business. Among the issues we are addressing are carbon impact, paper specifications and procurement, ethical conduct within our business and among our vendors, and community and charitable support. For more information, please visit our website: www.wiley.com/go/citizenship.
Copyright © 2013, 2010, 2007, 2004, 1998 John Wiley & Sons, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc. 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030-5774, (201)748-6011, fax (201) 748-6008, website http://www.wiley.com/go/permissions.
To order books or for customer service, please call 1-800-CALL WILEY (225-5945).
Evaluation copies are provided to qualified academics and professionals for review purposes only, for use in their courses during the next academic year. These copies are licensed and may not be sold or transferred to a third party. Upon completion of the review period, please return the evaluation copy to Wiley. Return instructions and a free of charge return mailing label are available at www.wiley.com/go/returnlabel. If you have chosen to adopt this textbook for use in your course, please accept this book as your complimentary desk copy. Outside of the United States, please contact your local sales representative.
Library of Congress Cataloging-in-Publication Data
Welch, Patrick J.
Economics: theory & practice/Patrick J. Welch, St. Louis University, Gerry F. Welch, St. Louis Community College at Meramec.—10th Edition.
pages cm
Includes index.
ISBN 978-1-118-23359-7 (pbk.)
1. Economics. I. Welch, Gerry F. II. Title.
HB171.5.W3935 2012
330—dc23
2012041901
Printed in the United States of America
10 9 8 7 6 5 4 3 2 1