1. √ Allocation of Time √ A Mathematical Analysis of Labor Supply √ Individual Supply Curve for Labor √ Market Supply Curve for Labor √ Other Uses of the Time Allocation Models √ Occupational Choice and Compensating Wage Differentials √ Labor Unions √Summary √Problems LABOR SUPPLY

2. √ Capital and the Rate of Return √ Determination of the Rate of Return √ The Firm's Demand for Capital √ Present Discounted Value Approach to Investment Decisions √ Optimal Resource Allocation over Time √ Labor Unions √Summary √Problems √Appendix to Chapter 23 The Mathematics of Compound Interest CAPITAL

3. EXTERNALITIES AND PUBLIC GOODS √ Defining Externalities √ Externalities and Allocative Efficiency √ Traditional Ways of Coping with Externalities √ Property Rights, Allocation, and the Coase Theorem √ Attributes of Public Goods √ Efficient Provision of Public Goods √ Lindahl Pricing of Public Goods √ Revealing the Demand for Public Goods: The Free Rider Problem √Summary √Problems LIMITS OF THE MARKET

4. √ Social Welfare Criteria √ Social Welfare Functions √ The Arrow Impossibility Theorem √ Direct Voting and Resource Allocation √ Representative Government √ Rent Seeking √Summary √Problems PUBLIC CHOICE THEORY