Economics: Principles, Problems, and Policies

The twelfth edition of "Economics" continues in the vein of its overall message: people who comprehend principles will have a great advantage functioning in - and making sense of - the emerging world. The new edition has been revised, polished and updated. A sample of the book's new discussions and analyzes include: the switch to GDP accounting; Soviet economy in transition; economics and the environment; the crisis in American financial institutions; economics of information; strategic behaviour; public choice and tax analysis; and more. The book is divided into two sections - Macroeconomics and Microeconomics - which are also available as separate texts.

Unique among principles texts, new Chapter 26: " Technology, R&D, and Efficiency" examines the microeconomics of start-up firms, optional R&D, product and process innovation, diffusion of innovation, and the controversy over "creative destruction". This new chapter follows a newly combined chapter on monopolistic competition and oligopoly. Chapter 26 provides a capstone of the four market models by examining their possible strengths and weaknesses as they relate to technological advance and efficiency in the very long run.
Expanded content on women, racial and ethnic minorities, and discrimination: A new Last Word for Chapter 2 examines the rise in the labor force participation of women as a significant positive factor in shifting the U.S. production possibilities curve rightward over time. Chapter 34, Income, Inequality, & Poverty, has increased coverage of women and minorities. Chapter 36 on labor market issues has a greatly expanded discussion of labor market discrimination, including discussion of the tastes-for-discrimination model (written at a principle's level), statistical discrimination, and occupational segregation.
Reduced formalism and added directness throughout. Particular concern was paid to the microeconomic chapters for technical accuracy. Readability has been further improved.
Multiple-choice "Quick Quizzes" to accompany the 22 Key Graphs. These 4-question quizzes allow students to test their understanding in the multiple-choice format. Added interactivity between the book and the student. Answers are provided, but upside down.
Virtually new Chapter 16: "Extending the Analysis of Aggregate Supply". This chapter thoroughly develops the distinction between short-run and long-run aggregate supply and uses it to develop the "extended AD-AS model". The extended model is then used to analyze demand-pull inflation, cost-push inflation, and recession. The chapter also treats other aggregate supply topics such as the Phillips Curve and supply-side economics.
Virtually new Chapter 17: "Disputes on Macro Theory and Policy". This "alternative perspectives" chapter has been completely rewritten with a focus on current policy debates relating to three questions: (1) What causes macro instability?; (2) Does the economy self-correct?; (3) Should policy makers adhere to rules or use discretion? The debates are tied directly to the analytical models developed in the prior chapters and include topics such as monetarism, misperceptions theory, real-business cycle theory, coordination failures, efficiency wages, menu costs, insider-outside theory, and other modern topics.
Streamlined Chapter 23 on pure competition. More focus on the MR=MC approach; less on TR - TC approach; greatly consolidated discussion of "qualifications" relating to pure competition and efficiency.
New state-of-the-art design.
Complete coverage of recent policy reforms, e.g., content on welfare reform, reform of the agricultural price support program and anti-trust issues, e.g., Microsoft.
New Web Based Questions: Teach concepts and encourage technology-based research skills.
Key Graphs: These 22 graphs have special relevance for the study of both microeconomics and macroeconomics.
Last Word Essays: These end of chapter mini-readings describe applications of economic concepts, short case studies, or views which contrast with mainstream thinking; new attractive art.
Extensive Glossary: Over 1000 entries.
Figure Legends: Legends accompanying diagrams are often in-depth self-contained analyses of the concepts.
Questions: 10-15 questions follow every chapter, one of which refers to the Last Word Essay; several of the questions are designated "key questions," are cited in the body of text, and answered in the Instructor's Manual, the Study Guide, and on our web site.
Quick Review Boxes: 3-4 mini lists interspersed in each chapter review content
New color scheme and design subtly incorporating the internet activity.
More direct, concise language and reduced formalism throughout the text. The book has been fully edited to clarify meaning. Over half of the chapter introductions are substantially revised and updated to add interest and jumpstart discussion. Examples are updated to reflect the current times, as are book terms. For instance, "material wants" is now called "economic wants" throughout the book, and the term "wealth effect," as it related to why the AD curve slopes downward, is now called the "real balances effect."
Over one quarter of Last Words, the boxed essays found at the end of chapters, have been replaced with more engaging examples. New Last Words include Chapter Four's "Shuffling the Deck," in which Economist Donald Boudreaux marvels at the way the market system arranges the world's tens of billions of individual resources, and Chapter Thirty's "Lojack: A Case of Positive Externalities," in which economists Ian Ayres and Steven Levitt point out how an auto anti-theft device produces large spillover benefits. In Chapter Nineteen's "The Taylor Rule: Could a Robot Replace Alan Greenspan?" economist John Taylor argues for a new monetary rule that would institutionalize appropriate Fed policy responses to changes in real output and inflation. Students are more excited by the text and will therefore learn even more.
Substantially revamped Chapter Four, now titled "The Market System." A new introduction, reorganized topics, and streamlined use of terms greatly improves ease of comprehension. The section on competition now generalizes the concept beyond pure competition, allowing for considerable shortening. The Five Fundamental Questions are now the Four Fundamentals, and discussion of profits and expanding industries and losses and declining industries has updated examples and briefer explanations.
Chapter Eight is now titled "Introduction to Economic Growth and Instability." Analytical aspects of growth are now tackled in Chapter Eighteen, while Chapter Eight previews economic growth, the business cycle, unemployment, and inflation. Although it incorporates growth discussion for the first time, substantial editing of language makes this edition's Chapter Eight shorter than its predecessor. Many figures were redesigned, particularly in regard to the business cycle. Table 8-3 now includes unemployment rates for Hispanics, and new figure 8-4 shows inflation rates over the years rather than just tracing out the CPI.
Chapters Nine and Ten, "Building the Aggregate Expenditure Model" and "Aggregate Expenditures: The Multiplier, Net Exports, and Government," significantly consolidate and simplify presentation of topics. Instructors who stress the AE model will still have a comprehensive explanation of it, but others can de-emphasize the topic and move on more quickly to the AD-AS framework.
Part IV, encompassing Chapters 16-19, is renamed and reorganized as "Long-Run Perspectives and Macroeconomic Debates." Chapter Sixteen, "Extending the Analysis of Aggregate Supply," has a briefer introduction and a simplified presentation of Phillips Curve topics. Now-dated historical discussion and the "two-camps" dichotomy have been omitted and the broader discussion of supply-side economics is scaled back. Chapter 17, "Economic Growth and the New Economy," includes new figures and revised tables. The 14th edition's section on productivity slowdown is replaced by a new section on Productivity Growth and the New Economy. Additionally Chapter 18, "Deficit, Surpluses, and the Public Debt," changes its placement in the book (it was chapter 19 in the 14th edition) and gets a new title to reflect the recent budget surpluses. It includes a much tighter and modern discussion of topics.
Bonus Web Chapter on Economies in Transition: Russia and China. Formerly Chapter 40 in the previous edition, these topics are fully updated and placed on the book Web site in a viewable, downloadable format. Although no longer in the print text, instructors who choose to use the bonus chapter in class have testbank and instructor manual materials to aid them.
In addition to being found in the text, McConnell's Key Graphs are now available on the book Web site as fully interactive Java applets. Students can manipulate data and see the results visually in these interactive on-line graphs.
Completely redesigned interior with appealing layout. The book is now more inviting to the students.Professors can customize this book to meet their exact needs and mix and match with other items on Primis Online allowing them maximum choice and flexibility. Instructors can choose between two delivery formats: custom printed books (in black and white) or custom eBooks (in color).