Modern Principles: Microeconomics, 3rd Edition

The title, Modern Principles, refers to a progressive approach to economic modeling and applications that allows for more realistic interpretation of today’s world events.

Mirroring the authors’ successful blog, the text eschews boxed features to focus on the writing behind compelling examples, key concepts, and applications.

An emphasis on incentives underscores how economics is about human behavior and how economics helps us understand why we do what we do (in other words, the decisions we make in the face of incentives in the real world). Covers of the franchise titles feature multiple hands to emphasize the power of the Invisible Hand, a key economic concept that refers to the power of incentives (and was coined by Adam Smith).

Table of Contents

Chapter 1: The Big Ideas
Chapter 2: The Power of Trade and Comparative Advantage
Chapter 3: Supply and Demand
Chapter 4: Equilibrium: How Supply and Demand Determine Prices
Chapter 5: Elasticity and Its Applications
Chapter 6: Taxes and Subsidies
Chapter 7: The Price System: Signals, Speculation, and Prediction
Chapter 8: Price Ceilings and Floors
Chapter 9: International Trade
Chapter 10: Externalities: When the Price Is Not Right
Chapter 11: Costs and Profit Maximization Under Competition
Chapter 12: Competition and the Invisible Hand
Chapter 13: Monopoly
Chapter 14: Price Discrimination and Pricing Strategy
Chapter 15: Oligopoly and Game Theory
Chapter 16: Competing for Monopoly: The Economics of Network Goods
Chapter 17: Monopolistic Competition and Advertising
Chapter 18: Labor Markets
Chapter 19: Public Goods and the Tragedy of the Commons
Chapter 20: Political Economy and Public Choice
Chapter 21: Economics, Ethics, and Public Policy
Chapter 22: Managing Incentives
Chapter 23: Stock Markets and Personal Finance
Chapter 24: Asymmetric Information: Moral Hazard and Adverse Selection
Chapter 25: Consumer Choice
Appendix A: Reading Graphsand Making Graphs
Appendix B: Solutions to Check Yourself Questions