Microeconomics

Significant Content Updates: The financial crisis and the subsequent slow recovery and the COVID-19 recession increased both student and faculty demand for principles-level content geared toward explaining directly and intuitively why markets and governments fail—sometimes spectacularly—in delivering optimal social outcomes. To satisfy that demand, the presentation of market failures, government failure, and public choice theory has been significantly restructured in Chapters 4 and 5 to allow students to quickly absorb the key lessons regarding externalities, public goods provision, voting paradoxes, the special-interest effect, and other problems that hinder either markets or governments from achieving optimal social outcomes.

Improved Efficiency for Instructors Faculty time is precious. To preserve as much of it as possible for the faculty adopting Macroeconomics, the author team went sentence by sentence and section by section, pulling out extraneous examples, eliminating unnecessary graphs, and—in some cases—removing entire sections that faculty reported they didn’t have time to teach. This streamlined presentation frees up faculty time for more advanced classroom activities, including experiments, debates, simulations, and various forms of peer instruction and team-based learning.

"Consider This" and "Last Word" boxed features drive home key ideas in an accessible, student-oriented manner. New examples include "Bitcoin and Cheap Electrons," "Hasta la Vista, Venezuela," and "Fiscal Policy During the COVID-19 Recession."

GUIDED PEER INSTRUCTION (or GPI) is a student-focused, interactive teaching method that has been shown to more than double student understanding relative to "chalk and talk" and other lecture-based presentation formats. Hundreds of in-class questions and answers that can be used to facilitate the peer instruction teaching method pioneered by Eric Mazur of Harvard University.

Application-Based Activities (ABAs) These immersive decision-making simulations are delivered digitally within the Connect platform and put students in the role of everyday economists. Students practice their economic thinking and problem-solving skills as they apply course concepts and see the implications of their decisions as they go. Each activity is designed as a 15-minute experience that can be replayed by eager students to build intuition.

Comprehensive Explanations at an Appropriate Level Microeconomics is comprehensive, analytical, and challenging, yet fully accessible to a wide range of students. Its thoroughness and accessibility enable instructors to select topics for special classroom emphasis with confidence that students can independently read and comprehend other assigned material in the book. Where needed, an extra sentence of explanation is provided. Brevity at the expense of clarity is false economy.

Fundamentals of the Market System Many economies throughout the world are making difficult transitions from planning systems to market systems. Our detailed description of the institutions and operation of the market system in Chapter 2 (The Market System and the Circular Flow) is even more relevant than before. We pay particular attention to property rights, entrepreneurship, freedom of enterprise and choice, competition, and the role of profits, because these concepts are often misunderstood by beginning students.

Early and Extensive Treatment of Government The public sector is an integral component of modern capitalism. This book introduces the role of government early. Chapter 4 (Market Failures Caused by Externalities and Asymmetric Information) systematically discusses public goods and government policies toward externalities. Chapter 5 (Public Goods, Public Choice, and Government Failure) details the factors that cause government failure.

Extensive Treatment of International Economics We give the principles and institutions of the global economy extensive treatment. Chapter 19 (International Trade) examines specialization and comparative advantage, arguments for protectionism, impacts of tariffs and subsidies, and various trade agreements. Global Perspective boxes add to the international flavour of the book.

Stress on the Theory of the Firm Extensive coverage of microeconomics in general and to the theory of the firm in particular helps beginning students understand the concepts of microeconomics.

Emphasis on Technological Change and Economic Growth This edition continues to emphasize economic growth. Chapter 1 (Limits, Alternatives, and Choices) uses the production possibilities curve to show the basic ingredients of growth.