Famous Figures and
Diagrams in
Economics
Edited by
Mark Blaug
Professor Emeritus, University of London and Professor
Emeritus, University of Buckingham, UK
Peter Lloyd
Professor Emeritus, Department of Economics, University of
Melbourne, Australia
Edward Elgar
Cheltenham, UK • Northampton, MA, USA
Contents
List of
List of contributors
Acknowledgements
figures
Introduction
Mark Blaug and Peter Lloyd
ix
xiv
xvii
1
PART I SINGLE MARKET ANALYSIS (PARTIAL
EQUILIBRIUM)
Basic tools of demand and supply curve analysis
1 Marshallian cross diagrams
Thomas M. Humphrey
2 The stability of equilibrium
Mark Blaug
3 Indifference curves and isoquants
Mark Blaug and Peter Lloyd
4 The elasticity of substitution
Robert Dixon
5 Substitution and income effects
Hans Haller
6 Engel curves
Ross Williams
7 Homothetic production and utility functions
Rolf Fare and Shawna Grosskopf
8 Long-run and short-run cost curves
Fiona Maclachlan
9 The product exhaustion theorem
Cassey Lee
10 Classification of technical change
Robert Dixon
11 Nash equilibrium
Jurgen Eichberger
29
38
43
50
58
64
69
73
80
83
89
vi
Famous figures and diagrams in economics
Welfare economics
12 Consumer surplus
Yew-Kwang Ng
13 The Harberger triangle
Yew-Kwang Ng
14 Community indifference curves and the Scitovsky'paradox'
Richard G. Lipsey
15 The taxation of external costs
Yew-Kwang Ng
16 Monopoly and price discrimination
William J. Baumol
17 Duopoly reaction curves
Nicola Giocoli
18 Monopolistic competition
Andrew Skinner
19 Kinked demand curves
R. Rothschild
97
104
110
121
128
137
145
154
Special markets and topics
20
21
22
23
24
25
26
27
28
Backward-bending labour supply curves
John E. King
Location theory: the contributions of von Thiinen and Losch
B. Curtis Eaton and Richard G. Lipsey
Hotelling's model of spatial competition
Nisvan Erkal
Cobweb diagrams
Marc Nerlove
Reswitching and reversing in capital theory
Avi J. Cohen and Geoffrey C. Harcourt
The Markowitz mean-variance diagram
Fiona Maclachlan
Rent-seeking diagrams
Anne O. Krueger
The logistic growth curve
J.S. Cramer
Graph theory and networks
Cassey Lee
161
170
179
184
191
199
204
209
212
Contents
vii
PART II GENERAL EQUILIBRIUM ANALYSIS
Basic tools of general equilibrium analysis
29 Circular flow diagrams
Roger E. Backhouse and Yann Giraud
30 The unit simplex
John Whalley
31 The Edgeworth box
^
John Creedy
32 The role of numbers in competition
John Creedy
33 Production possibilities frontiers
Ronald W. Jones
34 The utility-possibility frontier
John S. Chipman
35 The factor price frontier
Alan D. Woodland
36 Pareto efficiency
Peter Lloyd
37 The phase diagram technique for analyzing the stability of
multiple-market equilibrium
D. Wade Hands
38 The theory of second best and third best
Wai Chiu Woo
221
230
233
239
245
252
262
272
280
286
Open economies
39 The offer curve
Murray Kemp
40 The Stolper-Samuelson box
Henry Thompson
41 The Lerner diagram
;
Alan V. Deardorff
42 The trade theory diagram
Peter Lloyd
43 The four-quadrant diagram for the two-sector
Heckscher-Ohlin model
Arvind Panagariya
44 The integrated world equilibrium diagram
Avinash Dixit
295
300
305
311
317
323
viii
45
Famousfiguresand diagrams in economics
The optimal tariff
Murray Kemp
PART III
328
MACROECONOMICS
Macroeconomic analysis and stabilisation
46
47
48
49
50
51
52
53
54
Keynesian income determination diagrams
Michael Schneider
The IS-LM diagram
"
Warren Young
The Fleming-Mundell diagram
Russell Boyer and Warren Young
The aggregate demand aggregate supply diagram
Richard G. Lipsey
The Phillips curve
Richard G. Lipsey
The UV or Beveridge curve
Peter Rodenburg
The demand curve for money
David Laidler
Non-neutrality of money
He-ling Shi
The Laffer curve
Roger Middleton
337
348
356
365
377
393
401
406
412
Growth, income distribution and other topics
55
Intertemporal utility maximization - the Fisher diagram
Thomas M. Humphrey
56 The diagrams of the Solow-Swan growth model
Barbara J. Spencer and Robert W. Dimand
57 The Lorenz curve
Nanak Kakwani
58 Kuznets curve
Lisa Cameron, Lata Gangadharan and Sowmiya Ashok
421
Index
447
'
426
432
439