Preface

Coverage and scope

In response to faculty feedback and to ease transition to a new edition, Principles of Economics retains the organization of the previous editions. The book covers the breadth of economics topics and also provides the necessary depth to ensure the course is manageable for instructors and students alike. We strove to balance theory and application, as well as the amount of calculation and mathematical examples.

The book is organized into eight main parts:

• What is Economics? The first two chapters introduce students to the study of economics with a focus on making choices in a world of scarce resources.
• Supply and Demand, Chapters 3 and 4, introduces and explains the first analytical model in economics: supply, demand, and equilibrium, before showing applications in the markets for labor and finance.
• The Fundamentals of Microeconomic Theory, Chapters 5 through 10, begins the microeconomics portion of the text, presenting the theories of consumer behavior, production and costs, and the different models of market structure, including some simple game theory.
• Microeconomic Policy Issues, Chapters 11 through 18, covers the range of topics in applied micro, framed around the concepts of public goods and positive and negative externalities. Students explore competition and antitrust policies, environmental problems, poverty, income inequality, and other labor market issues. The text also covers information, risk and financial markets, as well as public economy.
• The Macroeconomic Perspective and Goals, Chapters 19 through 23, introduces a number of key concepts in macro: economic growth, unemployment and inflation, and international trade and capital flows.
• A Framework for Macroeconomic Analysis, Chapters 24 through 26, introduces the principal analytic model in macro, namely the aggregate demand/aggregate supply model. The model is then applied to the Keynesian and Neoclassical perspectives. The expenditure-output model is fully explained in a stand-alone appendix.
• Monetary and Fiscal Policy, Chapters 27 through 31, explains the role of money and the banking system, as well as monetary policy and financial regulation. Then the discussion switches to government deficits and fiscal policy.
• International Economics, Chapters 32 through 34, the final part of the text, introduces the international dimensions of economics, including international trade and protectionism.

Pedagogical foundation

The narrative explanations and analysis presented in Principles of Economics have been carefully crafted to provide a solid basis in economic concepts, flexibly approach skills and assess understanding, and deepen students’ engagement with the course materials. You will also find features that promote economic inquiry and explorations, including:

• Bring It Home: These explorations include a brief case study, specific to each chapter, which connects the chapter’s main topic to the real word. It is broken up into two parts: the first at the beginning of the chapter (in the intro module) and the second at chapter’s end, when students have learned what’s necessary to understand the case and “bring home” the chapter’s core concepts.
• Work It Out: These worked examples progress through an analytical or computational problem, and guide students step by step to find out how its solution is derived.
• Clear It Up: These boxes are deeper explanations of something in the main body of the text. Each Clear It Up starts with a question. The rest of the feature explains the answer.

Questions for each level of learning

Principles of Economics offers flexibility in practice and assessment, and provides a range of opportunities to check understanding and encourage deeper thinking and application.

• Self-Checks are analytical self-assessment questions that appear at the end of each module. They “click to reveal” an answer in the web view so students can check their understanding before moving on to the next module. Self-Check questions are not simple look-up questions. They push the student to think beyond what is said in the text. Self-Check questions are designed for formative (rather than summative) assessment. The questions and answers are explained so that students feel like they are being walked through the problem.
• Review Questions are simple recall questions from the chapter in open-response format (not multiple choice or true/false). The answers can be looked up in the text.
• Critical Thinking Questions are higher-level, conceptual questions that ask students to demonstrate their understanding by applying what they have learned in different contexts.
• Problems are exercises that give students additional practice working with the analytic and computational concepts in the module.

Reviewers

Bryan Aguiar, Northwest Arkansas Community College
Basil Al Hashimi, Mesa Community College
Emil Berendt, Mount St. Mary's University
Zena Buser, Adams State University
Douglas Campbell, The University of Memphis
Sanjukta Chaudhuri, University of Wisconsin - Eau Claire
Xueyu Cheng, Alabama State University
Robert Cunningham, Alma College
Rosa Lea Danielson, College of DuPage
Steven Deloach, Elon University
Michael Enz, Framingham State University
Debbie Evercloud, University of Colorado Denver
Reza Ghorashi, Stockton University
Robert Gillette, University of Kentucky
Shaomin Huang, Lewis-Clark State College
George Jones, University of Wisconsin-Rock County
Charles Kroncke, College of Mount St. Joseph
Teresa Laughlin, Palomar Community College
Carlos Liard-Muriente, Central Connecticut State University
Heather Luea, Kansas State University
Steven Lugauer, University of Notre Dame
William Mosher, Nashua Community College
Michael Netta, Hudson County Community College
Nick Noble, Miami University
Joe Nowakowski, Muskingum University
Shawn Osell, University of Wisconsin-Superior
Mark Owens, Middle Tennessee State University
Sonia Pereira, Barnard College
Jennifer Platania, Elon University
Robert Rycroft, University of Mary Washington
Adrienne Sachse, Florida State College at Jacksonville
Hans Schumann, Texas A&M University
Gina Shamshak, Goucher College
Chris Warburton, John Jay College of Criminal Justice, CUNY
Mark Witte, Northwestern University

Answers to Questions in the Book

Students can find answers to Self-Checks in the Answer Key. Answers to all Review Questions, Critical Thinking Questions, and Problems are provided only to instructors in the Instructor Answer Guide via the Instructor Resources page.