The book you are holding is a good start toward learning basic economic concepts. If you have bought (or are thinking about buying) this book, you are probably one of the following:
A college student who needs a supplement to a textbook in a course on principles of microeconomics, principles of macroeconomics, fundamentals of economics, or some other similar introductory course
A college student in an introductory course who needs some additional practice problems to prepare for an exam
A high school student taking Advanced Placement (AP) courses in microeconomics or macroeconomics for college credit
A student in an undergraduate or MBA program who needs a quick go-to guide for reference in intermediate or advanced economics courses
Someone who just wants to study up on economics on his own so that he can better understand news, business, and government actions
This book gives an overview of the topics that would typically be covered in an introductory course in economics. Typically, this is done in a two-semester sequence of microeconomics and macroeconomics. In these courses, you get the basic toolkit of skills and thinking style that are used in economic problem solving. Completion of these courses prepares students for more advanced analysis in intermediate microeconomics and intermediate macroeconomics, courses that typically expand the skills learned in principles courses by using more rigorous methods (that is to say, using more advanced math). Once students have a good grounding in the basic tools of economics, they are ready to apply them to some of the special topics you see outlined in the curriculum guide inside the back cover of this book.
We think you will find this book helpful and informative, as well as making a very “wonkish” topic approachable. That being said, there are a few things you should consider as you begin using this book. First, economics is not an easy subject, and it is not one that you can learn by just reading. In our many years of teaching introductory courses, we have seen that nearly every student who falters does so because she makes the same mistake—reading the material thoroughly and believing that this is sufficient. Unlike courses that you might take in humanities or even other social sciences, this is a necessary first step, but in order to understand economics, you really need to be doing economics.
Second, this is not a comprehensive resource on all things economics. In fact, it’s a “bare-bones” approach to understanding the basic ideas. We try to provide illustrative examples of the concepts covered, but this book is not saturated with the examples, inset boxes of relevant news stories, and slick graphics that have come to characterize the modern introductory economics textbook.
This book assumes that you have no background in economics, but that you are able to do high school–level mathematics. It may have been a while since you have used the kind of math and graphs included in this book, so we have included an appendix to give you a quick review.
The most important thing to remember as you study each chapter is that virtually every concept in economics can be broken down into three parts: the math (a formula representing the concept), the graph (a picture illustrating the concept and the formula), and the story (the explanation and verbal analysis of the concept). This is one of the reasons that many people find economics so challenging—most people are good at one or two of these things, but not so great in at least one of them. The good news is that if you know two of the three parts well, you can use them to help you remember the third.
As each concept is introduced, we walk you through the math (if math is involved), the graph, and the story behind the concept. To get the most out of this book, you need to do this yourself. This means that you need to go through the steps of solving each equation that is presented. Students almost universally struggle with using graphs on exams because they waited until the exam to get comfortable with replicating and using graphs. When you see a graph, replicate it and consider how you might graph a different situation from the one the example presents. Finally, be able to translate any graph or any formula you see into words to get used to providing analysis.
To give you practice in applying these economic tools and practice in using economic reasoning, there is a quiz at the end of each chapter. The best way to use each chapter is to go through all of the material thoroughly, working through the examples on paper, then take the end-of-chapter quiz. We recommend that you treat this as you would a closed-book exam and answer all the questions in a single sitting before reviewing the answers. Should you respond incorrectly to a question, don’t just reread that section of the chapter and note the correct answer. Instead, try to think about where you went wrong in either your reasoning or your analysis. Give yourself some time to let this sink in, then retake the exam, but this time justify to yourself why a particular answer is correct, rather than just putting down the appropriate letter. Once you can do this comfortably with at least 90 percent of the quiz, you are ready to move on.
At the end of the book, we have included a 100-question final exam to test your knowledge of the content.
Economics is typically broken down into macroeconomics and microeconomics, but we have compiled these subjects into one book. This means that you may be using this as a supplement to either a macroeconomics or microeconomics course and don’t need the other material. If you are using this to supplement a microeconomics course, you should focus on Chapters 1 to 10 and 18 to 20, and if you are using this to supplement a macroeconomics course, you should focus on Chapters 1 to 6 and 11 to 20. The final exam includes questions from both microeconomics and macroeconomics, but if you are focusing on microeconomics, you can stick to questions 1–50 and 86–100, and if you are focusing on macroeconomics, you can do questions 1–30 and 51–100.
We think that an important point needs to be made about graphs in the quizzes and final exams. Standardized multiple-choice and true-false test formats such as these don’t require you to create graphs, but we think you should try to graph the situation in the question if at all possible for a couple of reasons. First and foremost, a graph is a tool of analysis. We have found that students can sometimes reason themselves into a corner if they don’t use some other type of analysis (such as math or graphing) to help them work through their reasoning. Second, even though these quizzes and the final exam aren’t grading you on your ability to reason by creating graphs, we can virtually guarantee that any college course you take will grade you on your ability to create a graph. Therefore, you should take every opportunity you can to practice this important skill.
We hope you enjoy learning economics!