Table of Content

"I. Introduction to Economics 1. The Principles and Practice of Economics 2. Economic Methods and Economic Questions 3. Optimization: Doing the Best You Can 4. Demand, Supply, and Equilibrium II. Foundations of Microeconomics 5. Consumers and Incentives 6. Sellers and Incentives 7. Perfect Competition and the Invisible Hand 8. Trade 9. Externalities and Public Goods 10. The Government in the Economy: Taxation and Regulation 11. Markets for Factors of Production III. Market Structure 12. Monopoly 13. Game Theory and Strategic Play 14. Oligopoly and Monopolistic Competition IV. Extending the Microeconomic Toolbox 15. Trade-offs Involving Time and Risk 16. The Economics of Information 17. Auctions and Bargaining 18. Social Economics V. Introduction to Macroeconomics 19. The Wealth of Nations: Defining and Measuring Macroeconomic Aggregates 20. Aggregate Incomes VI. Long-Run Growth and Development 21. Economic Growth 22. Why Isn't the Whole World Developed? VII. Equilibrium in the Macroeconomy 23. Employment and Unemployment 24. Credit Markets 25. The Monetary System VIII. Short-Run Fluctuations and Macroeconomic Policy 26. Short-run Fluctuations 27. Countercyclical Macroeconomic Policy IX. Macroeconomics in a Global Economy 28. Macroeconomics and International Trade 29. Open Economy Macroeconomics "

Salient Features

"Three key principles — optimization, equilibrium, and empiricism — lie at the heart of the authors' approach. Chapters 1–4 introduce these key themes, and lay the groundwork for understanding the economic way of thinking about the world. 1. Optimization. The first principle — that people try to choose the best available option — is optimization. Economists believe that optimization explains most choices people make, including minor decisions like deciding whether to eat a cheeseburger, and major decisions like deciding whom to date or marry. When people fail to optimize perfectly, economic reasoning can be used to analyze the mistake and to suggest a better course of action. 2. Equilibrium. Economic systems tend toward equilibrium, wherein each economic actor feels that he or she cannot do any better by picking another course of action. This principle highlights the connections among economic actors and their choices. In a state of equilibrium, consumers and purveyors of goods and services are simultaneously optimizing, and their behaviors are consequently intertwined. 3. Empiricism. While the first two key principles are conceptual, the third is methodological. Economists use data to test economic theories, learn about the world, and speak to policymakers. The emphasis on matching theories with real-world data to answer specific questions helps to show students the evidence behind the theory, making economics concrete, interesting, and fun. "