Principles of Economics / Edition 10

Hardcover (Print)
Used and New from Other Sellers
Used and New from Other Sellers
from $79.95
Usually ships in 1-2 business days
(Save 69%)
Other sellers (Hardcover)
  • All (4) from $79.95   
  • New (1) from $531.80   
  • Used (3) from $106.99   
Close
Sort by
Page 1 of 1
Showing All
Note: Marketplace items are not eligible for any BN.com coupons and promotions
$531.80
Seller since 2011

Feedback rating:

(904)

Condition:

New — never opened or used in original packaging.

Like New — packaging may have been opened. A "Like New" item is suitable to give as a gift.

Very Good — may have minor signs of wear on packaging but item works perfectly and has no damage.

Good — item is in good condition but packaging may have signs of shelf wear/aging or torn packaging. All specific defects should be noted in the Comments section associated with each item.

Acceptable — item is in working order but may show signs of wear such as scratches or torn packaging. All specific defects should be noted in the Comments section associated with each item.

Used — An item that has been opened and may show signs of wear. All specific defects should be noted in the Comments section associated with each item.

Refurbished — A used item that has been renewed or updated and verified to be in proper working condition. Not necessarily completed by the original manufacturer.

New
Brand new and unread! Join our growing list of satisfied customers!

Ships from: Phoenix, MD

Usually ships in 1-2 business days

  • Standard, 48 States
  • Standard (AK, HI)
Page 1 of 1
Showing All
Close
Sort by

Overview

Reviewers tell us that Case/Fair/Oster is one of the all-time bestselling POE texts because they trust it to be clear, thorough and complete. Case/Fair/Oster readers also come away with a basic understanding of how market economies function, an appreciation for the things they do well, and a sense of things they do poorly. Readers begin to learn the art and science of economic thinking and begin to look at some policy and even personal decisions in a different way.
Read More Show Less

Editorial Reviews

Booknews
New edition of an introductory text first published in 1989, and revised at three-year intervals; this time, the interval is only two years, because world events have changed the economic landscape so dramatically. Economic theory, institutional material, and real-world applications are blended in every chapter. Among other changes in this edition, new topics are addressed including health-care reform, immigration, urban problems, the balanced budget amendment, and new trade treaties; new problems, and answers to even-numbered problems, have been added; and the visuals have been revamped. Annotation c. Book News, Inc., Portland, OR (booknews.com)
Read More Show Less

Product Details

  • ISBN-13: 9780132552912
  • Publisher: Prentice Hall
  • Publication date: 1/2/2011
  • Edition number: 10
  • Pages: 816
  • Product dimensions: 8.60 (w) x 10.90 (h) x 1.10 (d)

Meet the Author

Karl E. Case is Professor of Economics Emeritus at Wellesley College where he has taught for 34

years and served several tours of duty as Department Chair. He is a Senior Fellow at the Joint

Center for Housing Studies at Harvard University and a founding partner in the real estate

research firm of Fiserv Case Shiller Weiss, which produces the S&P Case-Shiller Index of home

prices.He serves as a member of the Index Advisory Committee of Standard and Poor’s, and along

with Ray Fair he serves on the Academic Advisory Board of the Federal Reserve Bank of Boston.

Before coming to Wellesley, he served as Head Tutor in Economics (director of undergraduate

studies) at Harvard, where he won the Allyn Young Teaching Prize.He was Associate Editor of

the Journal of Economic Perspectives and the Journal of Economic Education, and he was a member

of the AEA’s Committee on Economic Education.

Professor Case received his B.A. from Miami University in 1968; spent three years on active

duty in the Army, and received his Ph.D. in Economics from Harvard University in 1976.

Professor Case’s research has been in the areas of real estate, housing, and public finance. He

is author or coauthor of five books, including Principles of Economics, Economics and Tax Policy,

and Property Taxation: The Need for Reform, and he has published numerous articles in professional

journals.

For the last 25 years, his research has focused on real estate markets and prices.He has authored

numerous professional articles, many of which attempt to isolate the causes and consequences of

boom and bust cycles and their relationship to regional and national economic performance.

Ray C. Fair is Professor of Economics at Yale University. He is a member of the Cowles

Foundation at Yale and a Fellow of the Econometric Society. He received a B.A. in Economics

from Fresno State College in 1964 and a Ph.D. in Economics from MIT in 1968. He taught at

Princeton University from 1968 to 1974 and has been at Yale since 1974.

Professor Fair’s research has primarily been in the areas of macroeconomics and econometrics,

with particular emphasis on macroeconometric model building.He also has done work in the areas

of finance, voting behavior, and aging in sports. His publications include Specification, Estimation,

and Analysis of Macroeconometric Models (Harvard Press, 1984); Testing Macroeconometric Models

(Harvard Press, 1994); and Estimating How the Macroeconomy Works (Harvard Press, 2004).

Professor Fair has taught introductory and intermediate macroeconomics at Yale. He has

also taught graduate courses in macroeconomic theory and macroeconometrics.

Professor Fair’s U.S. and multicountry models are available for use on the Internet free of

charge. The address is http://fairmodel.econ.yale.edu.Many teachers have found that having students

work with the U.S. model on the Internet is a useful complement to an introductory

macroeconomics course.

Sharon M. Oster is the Dean of the Yale School of Management, where she is also the Frederic

Wolfe Professor of Economics and Management. Professor Oster joined Case and Fair as a coauthor

in the ninth edition of this book. Professor Oster has a B.A. in Economics from Hofstra

University and a Ph.D. in Economics from Harvard University.

Professor Oster’s research is in the area of industrial organization. She has worked on problems of

diffusion of innovation in a number of different industries, on the effect of regulations on business,

and on competitive strategy. She has published a number of articles in these areas and is the author of

several books, including Modern Competitive Analysis and The Strategic Management of Nonprofits.

Prior to joining the School of Management at Yale, Professor Oster taught for a number of

years in Yale’s Department of Economics. In the department, Professor Oster taught introductory

and intermediate microeconomics to undergraduates as well as several graduate courses in industrial

organization. Since 1982, Professor Oster has taught primarily in the Management School,

where she teaches the core microeconomics class for MBA students and a course in the area of competitive

strategy. Professor Oster also consults widely for businesses and nonprofit organizations

and has served on the boards of several publicly traded companies and nonprofit organizations.

Read More Show Less

Table of Contents

Brief Table of Contents

PART I Introduction to Economics

1 The Scope and Method of Economics

2 The Economic Problem: Scarcity and Choice

3 Demand, Supply, and Market Equilibrium

4 Demand and Supply Applications

5 Elasticity

PART II The Market System: Choices Made by Households and Firms

6 Household Behavior and Consumer Choice

7 The Production Process: The Behavior of Profit-Maximizing Firms

8 Short-Run Costs and Output Decisions

9 Long-Run Costs and Output Decisions

10 Input Demand: The Labor and Land Markets

11 Input Demand: The Capital Market and the Investment Decision

12 General Equilibrium and the Efficiency of Perfect Competition

PART III Market Imperfections and the Role of Government

13 Monopoly and Antitrust Policy

14 Oligopoly

15 Monopolistic Competition

16 Externalities, Public Goods, and Social Choice

17 Uncertainty and Asymmetric Information

18 Income Distribution and Poverty

19 Public Finance: The Economics of Taxation

PART IV Concepts and Problems in Macroeconomics

20 Introduction to Macroeconomics

21 Measuring National Output and National Income

22 Unemployment, Inflation, and Long-Run Growth

PART V The Core of Macroeconomic Theory

23 Aggregate Expenditure and Equilibrium Output

24 The Government and Fiscal Policy

25 The Money Supply and the Federal Reserve System

26 Money Demand and the Equilibrium Interest Rate

27 Aggregate Demand in the Goods and Money Markets

28 Aggregate Supply and the Equilibrium Price Level

29 The Labor Market In the Macroeconomy

PART VI Further Macroeconomics Issues

30 Financial Crises, Stabilization, and Deficits

31 Household and Firm Behavior in the Macroeconomy: A Further Look

32 Long-Run Growth

33 Alternative Views in Macroeconomics

PART VII The World Economy

34 International Trade, Comparative Advantage, and Protectionism

35 Open-Economy Macroeconomics: The Balance of Payments and Exchange Rates

36 Economic Growth in Developing and Transitional Economies

Read More Show Less

Preface

At the end of 2000 the United States was in its tenth consecutive year of an economic expansion, the longest in the country's history. Unemployment was at its lowest since 1970, productivity growth was high, and although oil prices had risen sharply, inflation was low. Chronic federal budget deficits had turned into budget surpluses; the Asian economies that suffered sharp downturns in 1998 were recovering fairly well (except for Japan); and even the transitional economies in Eastern Europe and Russia seemed to have turned the corner with reasonable rates of growth. Presidential candidates George W. Bush and Al Gore slugged it out in the fall of 2000 over alternative tax cut and social security proposals.

Perhaps the greatest change in the past three years has been the dramatic emergence of the technology-based "new economy." There can be no question that the dawn of the information age and the power of the Internet have changed the economy in ways that we do not yet fully understand. It has led to increased productivity, new products, and the transformation of many markets. What we don't know is how it will play out in the long run. Will the stock market continue to produce extraordinary returns to investors?

As this edition goes to press there are signs that the US. economy may be slowing down. President-elect George W. Bush and his economic advisors expressed concern in mid December about a possible recession in 2001, and the Federal Reserve stated after its December 19, 2000, meeting that the risks were "weighted mainly toward conditions that may generate economic weakness in the foreseeable future." Others, however, were concerned that inflation may be aproblem in the future because of tight labor markets and possible lagged responses to higher oil prices.

How rapidly times change. It has been our goal in writing this sixth edition to highlight many of these changes and the debates surrounding them. It is not our role to forecast future events. It is rather our goal in revising the text to set the discussion in an up-to-date world context and to highlight what we do and do not understand about it.

More than one million students have used Principles of Economics or one of its split volumes. We have made every effort in this new edition to be responsive to our readers' suggestions while maintaining the book's basic focus and pedagogical organization.

THE FOUNDATION

Despite major revisions and new features, the themes of the sixth edition are the same themes of the first five editions. The purpose of this book is to introduce the discipline of economics and to provide a basic understanding of how economies function. This requires a blend of economic theory institutional material, and real-world applications. We have maintained a balance between these ingredients in every chapter in this book.

THREE TIERED EXPLANATIONS: STORIES-GRAPHS-EQUATIONS

Professors who teach principles of economics are faced with a classroom of students with different abilities, backgrounds and learning styles. For some, analytical material is difficult no matter how it is presented; for others, graphs and equations seem to come naturally. The problem facing instructors and textbook authors is how to convey the core principles of the discipline to as many students as possible without selling the better students short.

Our approach to this problem is to present each core concept in three ways:

  • First, each concept is presented in the context of a simple intuitive story or illustrative example in words followed by a numerical illustration.
  • Second, the numerical example is presented graphically.
  • And finally, where appropriate, equations are used.

Perhaps the best example of our approach can be found in Chapter 7, "Short-Run Costs and Output Decisions," where we show an independent accountant facing diminishing returns.

MICROECONOMIC STRUCTURE

Although we have chosen to present microeconomics first, we have designed the text so that professors may proceed directly to macroeconomics after teaching the four introductory chapters.

The organization of the microeconomic chapters continues to reflect our belief that the best way to understand how market economies operate—and the best way to understand basic economic theory—is to work through the perfectly competitive model first, including discussions of output and input markets and the connections between them, before turning to noncompetitive market structures. When students understand how a simple competitive system works, they can start thinking about how the pieces of the economy "fit together." We think this is a better approach to teaching economics than some of the more traditional approaches, which encourage students to think of economics as a series of disconnected alternative market models.

Doing competition first also enables students to see the power of the market system. It is impossible to discuss the things that markets do well until students have seen how a simple system determines the allocation of resources. This is our purpose in Chapters 5-10. Chapter 11, "General Equilibrium and the Efficiency of Perfect Competition," remains a pivotal chapter that links the world of perfect competition with the imperfect world of noncompetitive markets, externalities, imperfect information, and poverty, all of which we discuss in Chapters 12-15 . The accompanying visual gives you an overview of our structure.

To visually reinforce basic connections between and among markets, we use the circular flow diagram. This diagram is introduced in Chapter 3 and recurs in Chapters 5, 6, 9, and 11. We believe strongly that students need to be continuously reminded that the material presented in each chapter builds upon the material in earlier chapters and is connected to material in later chapters. Throughout the entire book, the material in the diagrams that relates to the behavior of firms is illustrated in red while the material that relates to the behavior of households is illustrated in blue.

MACROECONOMIC STRUCTURE

As in the fifth edition, the macroeconomics section begins with three introductory chapters (16-18) that introduce students to macroeconomic tools, national income accounting, and inflation and unemployment (both in the United States and abroad). Descriptive coverage of long-run and short-run growth appears in Chapter 18. We reserve analytical coverage of growth for Chapter 28. Chapters 16-18 are followed by two chapters that present the basic functioning of the goods market (Chapters 19 and 20) and two chapters that present the basic functioning of the money market (Chapters 21 and 22). These four chapters introduce students to the concepts of fiscal and monetary policy. These chapters are followed by a chapter that brings the two markets together. This chapter, Chapter 23, does, in essence, a very simplified version of IS/LM analysis verbally. (The IS and LM curves are included in an appendix to Chapter 23 for those instructors who are interested in teaching them.)

We remain committed to the view that it is a mistake simply to throw aggregate demand and aggregate supply curves at students in the first few chapters of a principles book. To understand the AS and AD curves, students need to know about the functioning of both the goods market and the money market. The logic behind the simple demand curve is simply wrong when applied to the relationship between aggregate demand and the price level. Similarly, the logic behind the simple supply curve is wrong when applied to the relationship between aggregate supply and the price level.

Part of teaching economics is teaching economic reasoning. Our discipline is built around deductive logic. Once we teach students a pattern of logic, we want and expect them to apply it to new circumstances. When they apply the logic of a simple demand curve or simple supply curve to the aggregate demand or aggregate supply curve, the logic does not fit. We believe the best way to teach the reasoning embodied in the aggregate demand and aggregate supply curves without creating serious confusion is to build up to them carefully.

Given the groundwork that has been laid in Chapter 23, Chapter 24 proceeds directly to derive the aggregate demand curve and then the aggregate supply curve. The two curves are then put to determine the aggregate price level and to discuss the various theories of inflation.

Following the development of the AD and AS curves, we turn to a more detailed look at the labor market in Chapter 25 and discuss various theories of unemployment. By the end of Chapter 25, students have put the goods market, the money market, and the labor market together, and they have analyzed inflation, unemployment, and monetary and fiscal policy. Chapter 26 uses the material learned earlier to analyze a number of current macroeconomic issues, including proposed balanced-budget legislation and business cycles in Europe and Asia.

In Chapter 27, we take a closer look at the behavior of households and firms in the macroeconomy. The chapter can be skipped without losing the flow of the material. We close the macroeconomic section of the book by looking at economic growth and productivity (Chapter 28) and some current debates in macroeconomics (Chapter 29). The following visual provides an overview of our structure:

In macroeconomics, the circular flow of payments is used to visually reinforce concepts. This diagram recurs in various forms in Chapters 16, 20, and 21. Once again, throughout the entire book, the material in these diagrams related to the behavior of firms is illustrated in red while material related to the behavior of households is illustrated in blue.

MACROECONOMIC CONTENT

In preparing the sixth edition, we have maintained the two innovations we introduced in the second edition. The first of these is the treatment of aggregate supply. Clearly, there is strong disagreement among economists and across economics textbooks on the exact nature of the aggregate supply curve. All economists agree that if input prices rise at the same rate as output prices, the aggregate supply curve is vertical; firms have no incentive to change out-put if their costs and revenues change at the same rate. For the AS curve to have a positive slope in the short run, input prices must either be constant or there must be some lag in their adjustment.

Some textbooks assume that input prices are constant when the overall price level changes, essentially treating the aggregate supply curve as if it were the sum of individual market supply curves. This assumption of constant input prices is obviously unrealistic, and in the second edition we changed our description of the short-run AS curve to one that simply assumes some lags in input price adjustment when the overall price level changes. In addition, we clarified and expanded our description of the long-run aggregate supply curve, incorporating the concept of potential GDP.

Second, we continue to distinguish between inflation (a change in the overall price level) and sustained inflation (an increase in the overall price level that continues for some period of time). There can be confusion in students' minds as to what inflation is and whether or not it is a purely monetary phenomenon, and we think that this distinction helps to clarify our discussions.

INTERNATIONAL COVERAGE

We continue to integrate international examples in three ways. First, we discuss international examples and applications in boxed features that appear in most chapters. We have also integrated international examples directly into the text whenever appropriate. All international examples are listed in a table following the book's detailed table of contents. Second, we introduce imports and exports into the simple goods market model early in macroeconomics. Third, we continue to believe that a complete treatment of open market macroeconomics should not be taught until students have mastered the logic of a simple closed macroeconomy. For this reason, we have chosen to place the "open-economy macroeconomics" chapter in the final part of the book, entitled, "The World Economy."

NEW TO THE SIXTH EDITION

We developed our revision plan based on reviews, market surveys, and focus groups with over 40 professors as well as our own teaching experiences. Our goals for the sixth edition were to:

  1. Streamline the book without sacrificing core concepts.
  2. Integrate print, CD-ROM, and Web technologies.
  3. Increase coverage of growth and make it flexible.
  4. Update data and examples.
  5. Improve the pedagogical features.

A SHORTER BOOK

Revising a book involves adding new material, and there is a tendency for textbooks to grow in volume over time. However, student time is a scarce resource, and longer books are more costly to produce. Therefore, our goal throughout was to update, refine, and add material where needed, but to end up cutting excess baggage and obsolete material wherever possible. The bottom line is that the sixth edition contains five fewer chapters than the previous edition and is over 150 pages shorter.

Based on extensive market research, we discovered that many professors did not have the time to cover certain chapters, or they found selected chapters could be either streamlined and merged or moved to the book's supporting Web site. We used these recommendations to implement the following changes:

  • Streamlined previous edition Chapter 15, "Antitrust Policy and Regulation" and merged content with new Chapter 12, "Monopoly and Antitrust Policy."
  • Streamlined previous edition Chapter 18, "Public Finance: The Economics of :Vexation" and merged content with new Chapter 14, "Externalities, Public Goods, Imperfect Information, and Social Choice," and Chapter 15, "Income Distribution and Poverty."
  • Streamlined and merged previous edition Chapter 37, "Economic Growth in Developing Nations" and Chapter 38, "Economies in Transition and Alternative Economic Systems" into new Chapter 32, "Economic Growth in Developing and Transitional Economies."
  • Posted 3 chapters to the book's Web site at www.prenhall.com/casefair. Previous edition's Chapter 3, "The Structure of the U.S. Economy: The Private, Public and International Sectors," Chapter 19, "The Economics of Labor Markets and Labor Unions," and Chapter 20, "Current Topics in Applied Microeconomics: Health Care, Immigration, and Urban Problems." The key concepts from previous edition Chapter 3 appear in new edition Chapters 11-15, 30, and 31. The land and labor markets are covered in new edition Chapter 9. Health care and urban problems are covered in new edition Chapter 15.
  • Posted the "Case Studies" and the "Fast Facts" features on the book's Web site.

INTEGRATED PRINT, CD-ROM, AND WEB TECHNOLOGIES

A new, interactive ActiveEcon CD-ROM can be shrink-wrapped with this book for a small charge. It includes chapter summaries and outlines, self-assessment quizzes, key term definitions, and further explanations. Active Graphs are a key feature of the CD-ROM. Each Active Graph allows students to change the value of a variable and look at the effects on the equilibrium. Fifty-nine Active Graphs are referenced in the book with this icon.

New to this edition are end-of-chapter Web exercises that encourage students to use the Internet as a learning tool. Students research data at Web sites such as the U.S. Census Bureau, the Bureau of Labor Statistics, the White House, or Microsoft and are asked to apply the concepts of the chapter to a specific exercise. Students can access www.prenhall.com/casefair for links to complete these Web exercises.

GROWTH

A descriptive treatment of growth has been moved up to Chapter 18, "Long-Run and Short-Run Concerns: Growth, Productivity, Unemployment and Inflation:" Analysis is reserved for Chapter 28, "Long-Run Growth:" This approach gives instructors the flexibility to cover growth in the depth they choose.

RECENT DATA, EXAMPLES, EVENTS, AND TOPICS

Every chart, table, and graph in the book has been revised with the most recent data available. In addition, we have integrated topics that have generated a great deal of attention over the last few years—the impact of technology on the world economy, the economics of crime, the Justice Department's investigation of Microsoft, the budget surplus, and recent experiences of Russia and the economies of Eastern Europe and Asia, to name just a few.

TOOLS FOR LEARNING

As authors and teachers, we understand the challenges of the principles of economics course. Our pedagogical features are designed to illustrate and reinforce key economic concepts through real-world examples and applications.

NEWS ANALYSIS

We have included over 30 news articles from various sources including The New York Times, The Economist, The Wall Street Journal, and Los Angeles Times. A technology icon identifies those news articles that deal with topics such as electronic commerce and the impact of the Internet on the economy. Students can access www.prenhall.com/casefair for additional and updated articles and exercises.

An international icon highlights articles that deal with Europe, Russia, Asia, and Africa. The end-of-chapter material includes a problem related to the News Analysis articles.

FURTHER EXPLORATION

We have 13 boxes that provide students with additional information on a concept introduced in the chapter. The Chapter 1 box, for example, highlights the various branches of economic study including economic law, international economics, and labor economics. Chapter 4 discusses how London newspapers and New York restaurants consider elasticity when determining prices.

GRAPHS AND PHOTOS

Reading and interpreting graphs is a key part of understanding economic concepts. The Chapter 1 appendix, "How to Read and Understand Graphs," shows readers how to interpret the over 200 graphs featured in the book.

Fifty-nine graphs include an Active Graph icon to identify those graphs that appear on the interactive CD-ROM.

New to this edition are chapter-opening photos that preview chapter concepts.

Photos also appear in other areas within the chapters, including the News Analysis and Further Exploration features.

HIGHLIGHTS OF MAJOR CONCEPTS

We have set major economic concepts off from the text in highlighted boxes. These highlights flow logically from the preceding text and into the text that follows. Students tell us that they find these very useful as a way of reviewing the key points in each chapter to prepare for exams.

RUNNING GLOSSARY

Definitions of key terms appear boxed in the margin so they are easy to spot.

PROBLEM SETS AND SOLUTIONS

Each chapter and appendix ends with a problem set that asks students to think about what they've learned in the chapter. These problems are not simple memorization questions. Rather, they ask students to perform graphical analysis or to apply economics to a real-world situation or policy decision. Approximately 30 percent of the problems are new to this edition. More challenging problems are indicated by an asterisk. The solutions to all even-numbered problems appear at the back of the book so that students can check their own work. The solutions to all the problems, as well as additional problem sets, are available in the Instructor's Resource Manual.

WEB EXERCISES

New to this edition are end-of-chapter Web exercises that ask students to research data at Web sites such as the U.S. Census Bureau, the Bureau of Labor Statistics, the White House, and Microsoft and then apply the concepts of the chapter to a specific exercise.

OPTIONAL CHAPTERS

We have tried to keep uppermost in our minds that time is always tight in a principles course. For this reason, we have made sure that certain chapters can be skipped without losing the flow of the material. In microeconomics, Chapter 10, "Input Demand: The Capital Market and the Investment Decision;" can be skipped because Chapter 9, "Input Demand: The Labor and Land Markets," covers the basics of the capital market.

In macroeconomics, Chapters 27–29 are optional. The chapters in the world economy part, with the exception of Chapter 31, can be taught at any time that the instructor deems appropriate.

INTEGRATED LEARNING PACKAGE

The integrated learning package for the sixth edition reflects changes in technology and utilizes new ways of disseminating information. A customized Web site links with MyPHLIP (Prentice f Hall Learning on the Internet Partnership) to offer a comprehensive Internet package for the student and the instructor. An integrated package of software, printed supplements, videos, and reference guides completes the total teaching and learning package. Please contact your Prentice Hall sales representative for information on any of the Case/Fair supplements.

INTERNET RESOURCES

www.prenhall.com/casefair
MyPHLIP is a content-rich, multidisciplinary Web site with Internet exercises, activities, and resources related specifically to the sixth edition of Principles of Economics. New Internet resources are added every two weeks by a team of economics professors to provide both the student and the instructor with the most current, up-to-date resources available.

In the News Articles and Exercises, related to topics in each chapter, are fully supported by group activities, critical-thinking exercises, and discussion questions. These articles, from current news publications to economics-related publications, help show students the relevance of economics in today's world.

The Online Study Guide, prepared by Fernando Quijano of Dickinson State University, offers students another opportunity to sharpen their problem-solving skills and to assess their understanding of the text material. The Online Study Guide contains two levels of quizzes: definitional and applied. Each level includes 15 to 20 multiple-choice and true/false questions, and 2 essay questions per chapter. The Online Study Guide grades each question submitted by the student, provides immediate feedback for correct and incorrect answers, and allows students to e-mail results to up to four e-mail addresses. The MyPHLIP site also links the student to the Web Exercises featured in the textbook. These Web exercises are keyed to each chapter and direct the student to an appropriate, updated, economics-related Web site to gather data and analyze a specific economic problem.

For the instructor, MyPHLIP offers resources such as the Syllabus Manager, answers to Current Events and Internet exercises, and a Faculty Lounge area including teaching resources and faculty chat rooms. From the MyPHLIP Web site, instructors can also download supplements and lecture aids, including the Instructor's Manuals and PowerPoint Presentations. Instructors should contact their Prentice Hall sales representative to obtain the necessary username and password to access the faculty resources on MyPHLIP

ActiveEcon CD-ROM

This new interactive student CD-ROM, prepared by Mary Lesser of Iona College, in conjunction with Gregory M. Werner, Inc., includes, for each chapter, a tutorial walk-through, which incorporates a detailed summary of key concepts, Test Your Understanding, key tables and graphs, pop-up glossary of terms with expanded explanations, Active Graphs, and end-of-chapter self-assessment quizzes. The end-of-chapter quizzes contain 20 original multiple-choice questions. Fifty-nine Active Graphs are featured on the CD-ROM, which correspond to the most important figures in the text. Active Graphs are referenced with an icon.

Each Active Graph allows students to change the value of a variable and look at the effects on the equilibrium. The CD-ROM also links the student to the MyPHLIP Web site.

The sixth edition Instructor's Manual provides tips for integrating the ActiveEcon CD-ROM and the Mastering Economics CD-ROM (described as follows) into the course.

MASTERING ECONOMICS CD-ROM

The Mastering-Economics CD-ROM, developed by Active Learning Technologies, is an integrated series of 12 video-enhanced interactive exercises that follow the people and issues of CanGo, an e-business start up. Students use economic concepts to solve key business decisions including how to launch the start-up company's initial public offering (IPO), enter new markets for existing products, develop new products, determine prices, attract new employees, and anticipate competition from rivals. The videos illustrate the importance of an economic way of thinking to make real-world business decisions. Every episode includes three separate video segments: the first video clip introduces the episode topics by way of a current problem or issue at Canto. After viewing the first clip, students read more about the theory or concept and then work through a series of mufti-layered exercises. The exercises are composed of multiple-choice, true/false, fill-in, matching, ranking choices, comparisons, and one- or two-sentence answers. After completing the exercises, students watch another video clip. This resolution video illustrates one of the possible resolutions to the problem or decision faced by Canto's management team. A correlation guide that links the Mastering Economics segments with chapters of the book is included in the Instructor's Manuals. Please contact your local Prentice Hall sales representative for pricing information.

ONLINE COURSE OFFERINGS

WebCT

Developed by educators, WebCT provides faculty with easy-to-use Internet tools to create online courses. Prentice Hall provides the content and enhanced features to help instructors create a complete online course. Standard Online Courses are free when shrink-wrapped with a new copy of the sixth edition text and contain the online study guide and test questions derived from the test item files. The Premium Online Courses contain the online study guide, test questions, lecture notes created by economics professors to support each chapter of the book, video clips with a summary of the key points of each chapter, and PowerPoint. Please visit our Web site at www.prenhall.com/webct for more information or contact your local Prentice Hall sales representative.

BLACKBOARD/COURSE COMPASS

Easy to use, Blackboard's simple templates and tools make it easy to create, manage, and use online course materials. Prentice Hall provides the content and instructors can create online (r)(r) courses using the Blackboard tools which include design, communication, testing, and course management tools. Please visit our Web site location at www.prenhall.com/blackboard for more information. Blackboard is also available as a nationally hosted solution through CourseCompass, the Prentice Hall private label version of Blackboard. Visit www.coursecompass.com for more information.

TECHNOLOGY SUPPLEMENTS FOR THE INSTRUCTOR

PRENTICE HALL CUSTOM TESTS

Principles of Economics, Sixth Edition, is supported by a comprehensive set of six test item files with approximately 12,000 questions and problems with skill descriptors of fact, definition, conceptual, and analytical. These test item files are described in detail in the section of this preface entitled "Print Supplements:

Available for Windows and Macintosh, Prentice Hall Custom .Test is the computerized version of the test item files. The test program allows professors to edit, add, or delete questions frog the test item files, edit existing graphics and create new graphics, and export files to word processing programs.

POWERPOINT LECTURE PRESENTATION

Prepared by Fernando Quijano of Dickinson State University, the PowerPoint presentation offers summaries and necessary reinforcement of important text material. Many important graphs "build" over a sequencing of slides so that students may see the step-by-step process involved in economic analysis. The package will allow for instructors to make full-color, professional-looking presentations while providing the ability for custom handouts to be provided to the students.

INSTRUCTOR'S RESOURCE CD-ROM

The Instructor's Resource CD-ROM includes the computerized test banks, instructor's manuals, and PowerPoint Presentation.

ABC NEWS/PRENTICE HALL VIDEO LIBRARY

ABC News and Prentice Hall combine their individual expertise in academic publishing and global reporting to provide a comprehensive video ancillary to the sixth edition. The 2001 Economics Video Library contains news clips from Nightline, World News Tonight, Wall Street Journal Report, and 20/20. Each clip illustrates the vital, ongoing connections between what is learned in the classroom and what is happening in the world around us. All the videos are timely or timeless, and many can be used at different points in the course. The instructors' manuals provide suggestions on where and how to integrate each video.

PRINT SUPPLEMENTS

STUDY GUIDES

Two comprehensive study guides, one for microeconomics and one for macroeconomics, have been prepared by Thomas Beveridge of North Carolina State University. These study aids reinforce the textbook and provide students with additional applications and exercises. Each chapter contains the following elements:

  • Point-by-Point Objectives. A list of learning goals for the chapter, along with a summary of the material, helpful study hints, practice questions with solutions, and page references to the text.
  • Practice Tests. Approximately 20 multiple-choice questions and answers.
  • Application Questions. A series of questions that require the use of graphic or numerical analysis to solve economic problems.
  • Solutions. Worked-out solutions to all questions in the Study Guide, complete with page references to the text.
  • Comprehensive Part Exams. Seven part exams consisting of 25 multiple-choice questions, extended examples, and problem questions where appropriate test the students' overall comprehension.

The Study Guide also references the Web exercises from the text and alerts the student to relevant applications in the ActiveEcon CD-ROM.

THE WALL STREET JOURNAL PRINT AND INTERACTIVE EDITIONS

Prentice Hall has formed a strategic alliance with The Wall Street Journal, the most respected and trusted daily source for information on business and economics. For a small additional charge, Prentice Hall offers your students a 10-week subscription to The Wall Street Journal print edition and The Wall Street Journal Interactive Edition. Adopting professors will receive a complimentary one-year subscription of both the print and interactive version as well as weekly subject-specific Wall Street Journal educators' lesson plans.

THE FINANCIAL TIMES SUBSCRIPTION

We are pleased to announce a special partnership with The Financial Times. Upon adoption of Principles of Economics, Sixth Edition, instructors will receive a complimentary one-year personal subscription. Students receive a 15-week print subscription for $10. Please contact your Prentice Hall representative for details and ordering information.

INSTRUCTOR'S MANUALS

Two innovative instructor's manuals for Principles of Microeconomics and Principles of Macroeconomics, have been written by Mary Lesser of Iona College. The manuals are designed to help the instructor incorporate applicable elements of the sixth edition supplement package. The manuals include:

  • Detailed chapter outlines with key terminology, teaching notes, and lecture suggestions.
  • Solutions to all problems in the book.
  • Video Guide for the 2001 Economics Video Library.
  • Teaching Tips on incorporating the ActiveEcon CD-ROM.
  • Correlation guide that links the Mastering Economics CD-ROM with each chapter.
  • Topics for Class Discussion feature real-world ideas from the students' point of view.
  • Extended Applications, which include exercises, activities, and experiments to help make economics relevant to students.

THREE VOLUME TEST BANK FOR MICROECONOMICS

The sixth edition microeconomics test banks have been greatly expanded from the last edition to include over 5,500 questions. To help instructors select questions more quickly and efficiently, we have used the skill descriptors of fact, definition, conceptual, and analytical. Solutions and text pages where the solutions appear are also included.

Microeconomics Test Bank 1. Prepared by Jon L. Vencil of San Diego State University, this test bank includes over 3,000 questions, two-thirds of which are new to this edition. Types of questions include short-answer, analytical, multiple-choice, and true/false.

Microeconomics Test Bank 2. Prepared by Peter Zaleski of Villanova University, this test bank now includes 1,500 questions. Instructors can choose from a wide variety of short-answer, analytical, true/false, and multiple-choice questions.

Microeconomics Test Bank 3. New to the sixth edition supplement package is a third test bank prepared by Linda S. Ghent of Eastern Illinois University. This new test bank includes 1,000 short answer problems and questions. Application-type problems ask students to draw graphs and analyze tables.

THREE VOLUME TEST BANK FOR MACROECONOMICS

The sixth edition macroeconomics test banks have been expanded to include over 5,500 questions. To help instructors select questions more quickly and efficiently, we have used the skill descriptors to fact, definition, conceptual, and analytical. Solutions and text pages where the solutions appear are also included.

Macroeconomics Test Bank 1. Prepared by Rashid Al-Hmoud of Texas Tech University, this test bank includes over 3,000 questions, two-thirds of which are new or updated. Types of questions include short answer, analytical, true/false, and multiple-choice.

Macroeconomics Test Bank 2. Prepared by David Findlay of Colby College, this test bank now includes 1,500 questions. Instructors can choose from a wide variety of short-answer, analytical, true/false, and multiple-choice questions.

Macroeconomics TB 3. New to the sixth edition is a third test bank, prepared by Richard Gosselin of Houston Community College. This test bank includes 1,000 short answer problems and questions. Application-type problems ask students to draw graphs and analyze tables.

COLOR TRANSPARENCIES

All figures and tables from the text are reproduced as full-page, four-color acetates.

ECONOMIC EXPERIMENTS

Using Economic Experiments, Cases, and Activities in the Classroom, Second Edition, by Dirk Yandell of the University of San Diego, features 15 classroom experiments that illustrate key economic concepts. Also included are 9 case studies and several in-class exercises of varying lengths.

E-COMMERCE GUIDE

Electronic commerce is playing an increasingly important role in how business is conducted. Prentice Hall's Guide to E-Commerce and E-Businesses provides readers with background on the history and direction of E-Commerce, the impact it has on the economy, and how to use it as a source of economic information and data. This guide can be shrink-wrapped free with a copy of the sixth edition.

ACKNOWLEDGMENTS

We are grateful to the many people who helped us prepare the sixth edition. We thank Rod Banister, Senior Editor for Economics at Prentice Hall, for his help and enthusiasm. We are also grateful to Lena Buonanno, Senior Developmental Editor, for overseeing the entire project. The quality of the book owes much to her guidance. Gladys Soto, Managing Editor, Marie McHale, Editorial Assistant, and Susan McLaughlin, indefatigability marshaled the extensive array of supplements to accompany this text.

We were very fortunate and pleased to have the talent and support of Mary Lesser of Iona Collage. Mary prepared the ActiveEcon CD-ROM, the Instructor's Manuals, and WebCT and Blackboard content and also accuracy checked the selected solutions that appear at the end of the text. Our supplement package is greatly improved due to Mary's hard work. Mike Elia, our Developmental Editor for the previous edition, worked with Mary to help ensure the accuracy and coordination of the Active Graphs with our book.

Thanks also go to Thomas Beveridge of North Carolina State University who has carefully prepared each edition of our study guides.

Cynthia Regan, our Production Managing Editor, ensured that the production process of the book went smoothly. Josh McClary, our Marketing Manager, created a great marketing campaign.

We want to thank S. Brock Blomberg of Wellesley College for his assistance in preparing the end-of-chapter Web exercises, and Maryna Marynchenko and Jenny Stack for their research assistance and proofreading of the manuscript. Special thanks to Teri Stratford for locating the dynamic photos that appear in the book.

We also owe a debt of gratitude to those who reviewed the fifth edition or attended focus groups and provided us with a valuable insight as we prepared the new edition and its supplement package:

We welcome comments about the sixth edition. Please write to us care of Economics Editor, Prentice Hall Higher Education Division, One Lake Street, Upper Saddle River, NJ 07458.

Karl E. Case
Ray C. Fair

Read More Show Less

Introduction

At the end of 2000 the United States was in its tenth consecutive year of an economic expansion, the longest in the country's history. Unemployment was at its lowest since 1970, productivity growth was high, and although oil prices had risen sharply, inflation was low. Chronic federal budget deficits had turned into budget surpluses; the Asian economies that suffered sharp downturns in 1998 were recovering fairly well (except for Japan); and even the transitional economies in Eastern Europe and Russia seemed to have turned the corner with reasonable rates of growth. Presidential candidates George W. Bush and Al Gore slugged it out in the fall of 2000 over alternative tax cut and social security proposals.

Perhaps the greatest change in the past three years has been the dramatic emergence of the technology-based "new economy." There can be no question that the dawn of the information age and the power of the Internet have changed the economy in ways that we do not yet fully understand. It has led to increased productivity, new products, and the transformation of many markets. What we don't know is how it will play out in the long run. Will the stock market continue to produce extraordinary returns to investors?

As this edition goes to press there are signs that the US. economy may be slowing down. President-elect George W. Bush and his economic advisors expressed concern in mid December about a possible recession in 2001, and the Federal Reserve stated after its December 19, 2000, meeting that the risks were "weighted mainly toward conditions that may generate economic weakness in the foreseeable future." Others, however, were concerned that inflation may be aproblem in the future because of tight labor markets and possible lagged responses to higher oil prices.

How rapidly times change. It has been our goal in writing this sixth edition to highlight many of these changes and the debates surrounding them. It is not our role to forecast future events. It is rather our goal in revising the text to set the discussion in an up-to-date world context and to highlight what we do and do not understand about it.

More than one million students have used Principles of Economics or one of its split volumes. We have made every effort in this new edition to be responsive to our readers' suggestions while maintaining the book's basic focus and pedagogical organization.

THE FOUNDATION

Despite major revisions and new features, the themes of the sixth edition are the same themes of the first five editions. The purpose of this book is to introduce the discipline of economics and to provide a basic understanding of how economies function. This requires a blend of economic theory institutional material, and real-world applications. We have maintained a balance between these ingredients in every chapter in this book.

THREE TIERED EXPLANATIONS: STORIES-GRAPHS-EQUATIONS

Professors who teach principles of economics are faced with a classroom of students with different abilities, backgrounds and learning styles. For some, analytical material is difficult no matter how it is presented; for others, graphs and equations seem to come naturally. The problem facing instructors and textbook authors is how to convey the core principles of the discipline to as many students as possible without selling the better students short.

Our approach to this problem is to present each core concept in three ways:

  • First, each concept is presented in the context of a simple intuitive story or illustrative example in words followed by a numerical illustration.
  • Second, the numerical example is presented graphically.
  • And finally, where appropriate, equations are used.

Perhaps the best example of our approach can be found in Chapter 7, "Short-Run Costs and Output Decisions," where we show an independent accountant facing diminishing returns.

MICROECONOMIC STRUCTURE

Although we have chosen to present microeconomics first, we have designed the text so that professors may proceed directly to macroeconomics after teaching the four introductory chapters.

The organization of the microeconomic chapters continues to reflect our belief that the best way to understand how market economies operate—and the best way to understand basic economic theory—is to work through the perfectly competitive model first, including discussions of output and input markets and the connections between them, before turning to noncompetitive market structures. When students understand how a simple competitive system works, they can start thinking about how the pieces of the economy "fit together." We think this is a better approach to teaching economics than some of the more traditional approaches, which encourage students to think of economics as a series of disconnected alternative market models.

Doing competition first also enables students to see the power of the market system. It is impossible to discuss the things that markets do well until students have seen how a simple system determines the allocation of resources. This is our purpose in Chapters 5-10. Chapter 11, "General Equilibrium and the Efficiency of Perfect Competition," remains a pivotal chapter that links the world of perfect competition with the imperfect world of noncompetitive markets, externalities, imperfect information, and poverty, all of which we discuss in Chapters 12-15 . The accompanying visual gives you an overview of our structure.

To visually reinforce basic connections between and among markets, we use the circular flow diagram. This diagram is introduced in Chapter 3 and recurs in Chapters 5, 6, 9, and 11. We believe strongly that students need to be continuously reminded that the material presented in each chapter builds upon the material in earlier chapters and is connected to material in later chapters. Throughout the entire book, the material in the diagrams that relates to the behavior of firms is illustrated in red while the material that relates to the behavior of households is illustrated in blue.

MACROECONOMIC STRUCTURE

As in the fifth edition, the macroeconomics section begins with three introductory chapters (16-18) that introduce students to macroeconomic tools, national income accounting, and inflation and unemployment (both in the United States and abroad). Descriptive coverage of long-run and short-run growth appears in Chapter 18. We reserve analytical coverage of growth for Chapter 28. Chapters 16-18 are followed by two chapters that present the basic functioning of the goods market (Chapters 19 and 20) and two chapters that present the basic functioning of the money market (Chapters 21 and 22). These four chapters introduce students to the concepts of fiscal and monetary policy. These chapters are followed by a chapter that brings the two markets together. This chapter, Chapter 23, does, in essence, a very simplified version of IS/LM analysis verbally. (The IS and LM curves are included in an appendix to Chapter 23 for those instructors who are interested in teaching them.)

We remain committed to the view that it is a mistake simply to throw aggregate demand and aggregate supply curves at students in the first few chapters of a principles book. To understand the AS and AD curves, students need to know about the functioning of both the goods market and the money market. The logic behind the simple demand curve is simply wrong when applied to the relationship between aggregate demand and the price level. Similarly, the logic behind the simple supply curve is wrong when applied to the relationship between aggregate supply and the price level.

Part of teaching economics is teaching economic reasoning. Our discipline is built around deductive logic. Once we teach students a pattern of logic, we want and expect them to apply it to new circumstances. When they apply the logic of a simple demand curve or simple supply curve to the aggregate demand or aggregate supply curve, the logic does not fit. We believe the best way to teach the reasoning embodied in the aggregate demand and aggregate supply curves without creating serious confusion is to build up to them carefully.

Given the groundwork that has been laid in Chapter 23, Chapter 24 proceeds directly to derive the aggregate demand curve and then the aggregate supply curve. The two curves are then put to determine the aggregate price level and to discuss the various theories of inflation.

Following the development of the AD and AS curves, we turn to a more detailed look at the labor market in Chapter 25 and discuss various theories of unemployment. By the end of Chapter 25, students have put the goods market, the money market, and the labor market together, and they have analyzed inflation, unemployment, and monetary and fiscal policy. Chapter 26 uses the material learned earlier to analyze a number of current macroeconomic issues, including proposed balanced-budget legislation and business cycles in Europe and Asia.

In Chapter 27, we take a closer look at the behavior of households and firms in the macroeconomy. The chapter can be skipped without losing the flow of the material. We close the macroeconomic section of the book by looking at economic growth and productivity (Chapter 28) and some current debates in macroeconomics (Chapter 29). The following visual provides an overview of our structure:

In macroeconomics, the circular flow of payments is used to visually reinforce concepts. This diagram recurs in various forms in Chapters 16, 20, and 21. Once again, throughout the entire book, the material in these diagrams related to the behavior of firms is illustrated in red while material related to the behavior of households is illustrated in blue.

MACROECONOMIC CONTENT

In preparing the sixth edition, we have maintained the two innovations we introduced in the second edition. The first of these is the treatment of aggregate supply. Clearly, there is strong disagreement among economists and across economics textbooks on the exact nature of the aggregate supply curve. All economists agree that if input prices rise at the same rate as output prices, the aggregate supply curve is vertical; firms have no incentive to change out-put if their costs and revenues change at the same rate. For the AS curve to have a positive slope in the short run, input prices must either be constant or there must be some lag in their adjustment.

Some textbooks assume that input prices are constant when the overall price level changes, essentially treating the aggregate supply curve as if it were the sum of individual market supply curves. This assumption of constant input prices is obviously unrealistic, and in the second edition we changed our description of the short-run AS curve to one that simply assumes some lags in input price adjustment when the overall price level changes. In addition, we clarified and expanded our description of the long-run aggregate supply curve, incorporating the concept of potential GDP.

Second, we continue to distinguish between inflation (a change in the overall price level) and sustained inflation (an increase in the overall price level that continues for some period of time). There can be confusion in students' minds as to what inflation is and whether or not it is a purely monetary phenomenon, and we think that this distinction helps to clarify our discussions.

INTERNATIONAL COVERAGE

We continue to integrate international examples in three ways. First, we discuss international examples and applications in boxed features that appear in most chapters. We have also integrated international examples directly into the text whenever appropriate. All international examples are listed in a table following the book's detailed table of contents. Second, we introduce imports and exports into the simple goods market model early in macroeconomics. Third, we continue to believe that a complete treatment of open market macroeconomics should not be taught until students have mastered the logic of a simple closed macroeconomy. For this reason, we have chosen to place the "open-economy macroeconomics" chapter in the final part of the book, entitled, "The World Economy."

NEW TO THE SIXTH EDITION

We developed our revision plan based on reviews, market surveys, and focus groups with over 40 professors as well as our own teaching experiences. Our goals for the sixth edition were to:

  1. Streamline the book without sacrificing core concepts.
  2. Integrate print, CD-ROM, and Web technologies.
  3. Increase coverage of growth and make it flexible.
  4. Update data and examples.
  5. Improve the pedagogical features.

A SHORTER BOOK

Revising a book involves adding new material, and there is a tendency for textbooks to grow in volume over time. However, student time is a scarce resource, and longer books are more costly to produce. Therefore, our goal throughout was to update, refine, and add material where needed, but to end up cutting excess baggage and obsolete material wherever possible. The bottom line is that the sixth edition contains five fewer chapters than the previous edition and is over 150 pages shorter.

Based on extensive market research, we discovered that many professors did not have the time to cover certain chapters, or they found selected chapters could be either streamlined and merged or moved to the book's supporting Web site. We used these recommendations to implement the following changes:

  • Streamlined previous edition Chapter 15, "Antitrust Policy and Regulation" and merged content with new Chapter 12, "Monopoly and Antitrust Policy."
  • Streamlined previous edition Chapter 18, "Public Finance: The Economics of :Vexation" and merged content with new Chapter 14, "Externalities, Public Goods, Imperfect Information, and Social Choice," and Chapter 15, "Income Distribution and Poverty."
  • Streamlined and merged previous edition Chapter 37, "Economic Growth in Developing Nations" and Chapter 38, "Economies in Transition and Alternative Economic Systems" into new Chapter 32, "Economic Growth in Developing and Transitional Economies."
  • Posted 3 chapters to the book's Web site at www.prenhall.com/casefair. Previous edition's Chapter 3, "The Structure of the U.S. Economy: The Private, Public and International Sectors," Chapter 19, "The Economics of Labor Markets and Labor Unions," and Chapter 20, "Current Topics in Applied Microeconomics: Health Care, Immigration, and Urban Problems." The key concepts from previous edition Chapter 3 appear in new edition Chapters 11-15, 30, and 31. The land and labor markets are covered in new edition Chapter 9. Health care and urban problems are covered in new edition Chapter 15.
  • Posted the "Case Studies" and the "Fast Facts" features on the book's Web site.

INTEGRATED PRINT, CD-ROM, AND WEB TECHNOLOGIES

A new, interactive ActiveEcon CD-ROM can be shrink-wrapped with this book for a small charge. It includes chapter summaries and outlines, self-assessment quizzes, key term definitions, and further explanations. Active Graphs are a key feature of the CD-ROM. Each Active Graph allows students to change the value of a variable and look at the effects on the equilibrium. Fifty-nine Active Graphs are referenced in the book with this icon.

New to this edition are end-of-chapter Web exercises that encourage students to use the Internet as a learning tool. Students research data at Web sites such as the U.S. Census Bureau, the Bureau of Labor Statistics, the White House, or Microsoft and are asked to apply the concepts of the chapter to a specific exercise. Students can access www.prenhall.com/casefair for links to complete these Web exercises.

GROWTH

A descriptive treatment of growth has been moved up to Chapter 18, "Long-Run and Short-Run Concerns: Growth, Productivity, Unemployment and Inflation:" Analysis is reserved for Chapter 28, "Long-Run Growth:" This approach gives instructors the flexibility to cover growth in the depth they choose.

RECENT DATA, EXAMPLES, EVENTS, AND TOPICS

Every chart, table, and graph in the book has been revised with the most recent data available. In addition, we have integrated topics that have generated a great deal of attention over the last few years—the impact of technology on the world economy, the economics of crime, the Justice Department's investigation of Microsoft, the budget surplus, and recent experiences of Russia and the economies of Eastern Europe and Asia, to name just a few.

TOOLS FOR LEARNING

As authors and teachers, we understand the challenges of the principles of economics course. Our pedagogical features are designed to illustrate and reinforce key economic concepts through real-world examples and applications.

NEWS ANALYSIS

We have included over 30 news articles from various sources including The New York Times, The Economist, The Wall Street Journal, and Los Angeles Times. A technology icon identifies those news articles that deal with topics such as electronic commerce and the impact of the Internet on the economy. Students can access www.prenhall.com/casefair for additional and updated articles and exercises.

An international icon highlights articles that deal with Europe, Russia, Asia, and Africa. The end-of-chapter material includes a problem related to the News Analysis articles.

FURTHER EXPLORATION

We have 13 boxes that provide students with additional information on a concept introduced in the chapter. The Chapter 1 box, for example, highlights the various branches of economic study including economic law, international economics, and labor economics. Chapter 4 discusses how London newspapers and New York restaurants consider elasticity when determining prices.

GRAPHS AND PHOTOS

Reading and interpreting graphs is a key part of understanding economic concepts. The Chapter 1 appendix, "How to Read and Understand Graphs," shows readers how to interpret the over 200 graphs featured in the book.

Fifty-nine graphs include an Active Graph icon to identify those graphs that appear on the interactive CD-ROM.

New to this edition are chapter-opening photos that preview chapter concepts.

Photos also appear in other areas within the chapters, including the News Analysis and Further Exploration features.

HIGHLIGHTS OF MAJOR CONCEPTS

We have set major economic concepts off from the text in highlighted boxes. These highlights flow logically from the preceding text and into the text that follows. Students tell us that they find these very useful as a way of reviewing the key points in each chapter to prepare for exams.

RUNNING GLOSSARY

Definitions of key terms appear boxed in the margin so they are easy to spot.

PROBLEM SETS AND SOLUTIONS

Each chapter and appendix ends with a problem set that asks students to think about what they've learned in the chapter. These problems are not simple memorization questions. Rather, they ask students to perform graphical analysis or to apply economics to a real-world situation or policy decision. Approximately 30 percent of the problems are new to this edition. More challenging problems are indicated by an asterisk. The solutions to all even-numbered problems appear at the back of the book so that students can check their own work. The solutions to all the problems, as well as additional problem sets, are available in the Instructor's Resource Manual.

WEB EXERCISES

New to this edition are end-of-chapter Web exercises that ask students to research data at Web sites such as the U.S. Census Bureau, the Bureau of Labor Statistics, the White House, and Microsoft and then apply the concepts of the chapter to a specific exercise.

OPTIONAL CHAPTERS

We have tried to keep uppermost in our minds that time is always tight in a principles course. For this reason, we have made sure that certain chapters can be skipped without losing the flow of the material. In microeconomics, Chapter 10, "Input Demand: The Capital Market and the Investment Decision;" can be skipped because Chapter 9, "Input Demand: The Labor and Land Markets," covers the basics of the capital market.

In macroeconomics, Chapters 27–29 are optional. The chapters in the world economy part, with the exception of Chapter 31, can be taught at any time that the instructor deems appropriate.

INTEGRATED LEARNING PACKAGE

The integrated learning package for the sixth edition reflects changes in technology and utilizes new ways of disseminating information. A customized Web site links with MyPHLIP (Prentice f Hall Learning on the Internet Partnership) to offer a comprehensive Internet package for the student and the instructor. An integrated package of software, printed supplements, videos, and reference guides completes the total teaching and learning package. Please contact your Prentice Hall sales representative for information on any of the Case/Fair supplements.

INTERNET RESOURCES

www.prenhall.com/casefair
MyPHLIP is a content-rich, multidisciplinary Web site with Internet exercises, activities, and resources related specifically to the sixth edition of Principles of Economics. New Internet resources are added every two weeks by a team of economics professors to provide both the student and the instructor with the most current, up-to-date resources available.

In the News Articles and Exercises, related to topics in each chapter, are fully supported by group activities, critical-thinking exercises, and discussion questions. These articles, from current news publications to economics-related publications, help show students the relevance of economics in today's world.

The Online Study Guide, prepared by Fernando Quijano of Dickinson State University, offers students another opportunity to sharpen their problem-solving skills and to assess their understanding of the text material. The Online Study Guide contains two levels of quizzes: definitional and applied. Each level includes 15 to 20 multiple-choice and true/false questions, and 2 essay questions per chapter. The Online Study Guide grades each question submitted by the student, provides immediate feedback for correct and incorrect answers, and allows students to e-mail results to up to four e-mail addresses. The MyPHLIP site also links the student to the Web Exercises featured in the textbook. These Web exercises are keyed to each chapter and direct the student to an appropriate, updated, economics-related Web site to gather data and analyze a specific economic problem.

For the instructor, MyPHLIP offers resources such as the Syllabus Manager, answers to Current Events and Internet exercises, and a Faculty Lounge area including teaching resources and faculty chat rooms. From the MyPHLIP Web site, instructors can also download supplements and lecture aids, including the Instructor's Manuals and PowerPoint Presentations. Instructors should contact their Prentice Hall sales representative to obtain the necessary username and password to access the faculty resources on MyPHLIP

ActiveEcon CD-ROM

This new interactive student CD-ROM, prepared by Mary Lesser of Iona College, in conjunction with Gregory M. Werner, Inc., includes, for each chapter, a tutorial walk-through, which incorporates a detailed summary of key concepts, Test Your Understanding, key tables and graphs, pop-up glossary of terms with expanded explanations, Active Graphs, and end-of-chapter self-assessment quizzes. The end-of-chapter quizzes contain 20 original multiple-choice questions. Fifty-nine Active Graphs are featured on the CD-ROM, which correspond to the most important figures in the text. Active Graphs are referenced with an icon.

Each Active Graph allows students to change the value of a variable and look at the effects on the equilibrium. The CD-ROM also links the student to the MyPHLIP Web site.

The sixth edition Instructor's Manual provides tips for integrating the ActiveEcon CD-ROM and the Mastering Economics CD-ROM (described as follows) into the course.

MASTERING ECONOMICS CD-ROM

The Mastering-Economics CD-ROM, developed by Active Learning Technologies, is an integrated series of 12 video-enhanced interactive exercises that follow the people and issues of CanGo, an e-business start up. Students use economic concepts to solve key business decisions including how to launch the start-up company's initial public offering (IPO), enter new markets for existing products, develop new products, determine prices, attract new employees, and anticipate competition from rivals. The videos illustrate the importance of an economic way of thinking to make real-world business decisions. Every episode includes three separate video segments: the first video clip introduces the episode topics by way of a current problem or issue at Canto. After viewing the first clip, students read more about the theory or concept and then work through a series of mufti-layered exercises. The exercises are composed of multiple-choice, true/false, fill-in, matching, ranking choices, comparisons, and one- or two-sentence answers. After completing the exercises, students watch another video clip. This resolution video illustrates one of the possible resolutions to the problem or decision faced by Canto's management team. A correlation guide that links the Mastering Economics segments with chapters of the book is included in the Instructor's Manuals. Please contact your local Prentice Hall sales representative for pricing information.

ONLINE COURSE OFFERINGS

WebCT

Developed by educators, WebCT provides faculty with easy-to-use Internet tools to create online courses. Prentice Hall provides the content and enhanced features to help instructors create a complete online course. Standard Online Courses are free when shrink-wrapped with a new copy of the sixth edition text and contain the online study guide and test questions derived from the test item files. The Premium Online Courses contain the online study guide, test questions, lecture notes created by economics professors to support each chapter of the book, video clips with a summary of the key points of each chapter, and PowerPoint. Please visit our Web site at www.prenhall.com/webct for more information or contact your local Prentice Hall sales representative.

BLACKBOARD/COURSE COMPASS

Easy to use, Blackboard's simple templates and tools make it easy to create, manage, and use online course materials. Prentice Hall provides the content and instructors can create online (r)(r) courses using the Blackboard tools which include design, communication, testing, and course management tools. Please visit our Web site location at www.prenhall.com/blackboard for more information. Blackboard is also available as a nationally hosted solution through CourseCompass, the Prentice Hall private label version of Blackboard. Visit www.coursecompass.com for more information.

TECHNOLOGY SUPPLEMENTS FOR THE INSTRUCTOR

PRENTICE HALL CUSTOM TESTS

Principles of Economics, Sixth Edition, is supported by a comprehensive set of six test item files with approximately 12,000 questions and problems with skill descriptors of fact, definition, conceptual, and analytical. These test item files are described in detail in the section of this preface entitled "Print Supplements:

Available for Windows and Macintosh, Prentice Hall Custom .Test is the computerized version of the test item files. The test program allows professors to edit, add, or delete questions frog the test item files, edit existing graphics and create new graphics, and export files to word processing programs.

POWERPOINT LECTURE PRESENTATION

Prepared by Fernando Quijano of Dickinson State University, the PowerPoint presentation offers summaries and necessary reinforcement of important text material. Many important graphs "build" over a sequencing of slides so that students may see the step-by-step process involved in economic analysis. The package will allow for instructors to make full-color, professional-looking presentations while providing the ability for custom handouts to be provided to the students.

INSTRUCTOR'S RESOURCE CD-ROM

The Instructor's Resource CD-ROM includes the computerized test banks, instructor's manuals, and PowerPoint Presentation.

ABC NEWS/PRENTICE HALL VIDEO LIBRARY

ABC News and Prentice Hall combine their individual expertise in academic publishing and global reporting to provide a comprehensive video ancillary to the sixth edition. The 2001 Economics Video Library contains news clips from Nightline, World News Tonight, Wall Street Journal Report, and 20/20. Each clip illustrates the vital, ongoing connections between what is learned in the classroom and what is happening in the world around us. All the videos are timely or timeless, and many can be used at different points in the course. The instructors' manuals provide suggestions on where and how to integrate each video.

PRINT SUPPLEMENTS

STUDY GUIDES

Two comprehensive study guides, one for microeconomics and one for macroeconomics, have been prepared by Thomas Beveridge of North Carolina State University. These study aids reinforce the textbook and provide students with additional applications and exercises. Each chapter contains the following elements:

  • Point-by-Point Objectives. A list of learning goals for the chapter, along with a summary of the material, helpful study hints, practice questions with solutions, and page references to the text.
  • Practice Tests. Approximately 20 multiple-choice questions and answers.
  • Application Questions. A series of questions that require the use of graphic or numerical analysis to solve economic problems.
  • Solutions. Worked-out solutions to all questions in the Study Guide, complete with page references to the text.
  • Comprehensive Part Exams. Seven part exams consisting of 25 multiple-choice questions, extended examples, and problem questions where appropriate test the students' overall comprehension.

The Study Guide also references the Web exercises from the text and alerts the student to relevant applications in the ActiveEcon CD-ROM.

THE WALL STREET JOURNAL PRINT AND INTERACTIVE EDITIONS

Prentice Hall has formed a strategic alliance with The Wall Street Journal, the most respected and trusted daily source for information on business and economics. For a small additional charge, Prentice Hall offers your students a 10-week subscription to The Wall Street Journal print edition and The Wall Street Journal Interactive Edition. Adopting professors will receive a complimentary one-year subscription of both the print and interactive version as well as weekly subject-specific Wall Street Journal educators' lesson plans.

THE FINANCIAL TIMES SUBSCRIPTION

We are pleased to announce a special partnership with The Financial Times. Upon adoption of Principles of Economics, Sixth Edition, instructors will receive a complimentary one-year personal subscription. Students receive a 15-week print subscription for $10. Please contact your Prentice Hall representative for details and ordering information.

INSTRUCTOR'S MANUALS

Two innovative instructor's manuals for Principles of Microeconomics and Principles of Macroeconomics, have been written by Mary Lesser of Iona College. The manuals are designed to help the instructor incorporate applicable elements of the sixth edition supplement package. The manuals include:

  • Detailed chapter outlines with key terminology, teaching notes, and lecture suggestions.
  • Solutions to all problems in the book.
  • Video Guide for the 2001 Economics Video Library.
  • Teaching Tips on incorporating the ActiveEcon CD-ROM.
  • Correlation guide that links the Mastering Economics CD-ROM with each chapter.
  • Topics for Class Discussion feature real-world ideas from the students' point of view.
  • Extended Applications, which include exercises, activities, and experiments to help make economics relevant to students.

THREE VOLUME TEST BANK FOR MICROECONOMICS

The sixth edition microeconomics test banks have been greatly expanded from the last edition to include over 5,500 questions. To help instructors select questions more quickly and efficiently, we have used the skill descriptors of fact, definition, conceptual, and analytical. Solutions and text pages where the solutions appear are also included.

Microeconomics Test Bank 1. Prepared by Jon L. Vencil of San Diego State University, this test bank includes over 3,000 questions, two-thirds of which are new to this edition. Types of questions include short-answer, analytical, multiple-choice, and true/false.

Microeconomics Test Bank 2. Prepared by Peter Zaleski of Villanova University, this test bank now includes 1,500 questions. Instructors can choose from a wide variety of short-answer, analytical, true/false, and multiple-choice questions.

Microeconomics Test Bank 3. New to the sixth edition supplement package is a third test bank prepared by Linda S. Ghent of Eastern Illinois University. This new test bank includes 1,000 short answer problems and questions. Application-type problems ask students to draw graphs and analyze tables.

THREE VOLUME TEST BANK FOR MACROECONOMICS

The sixth edition macroeconomics test banks have been expanded to include over 5,500 questions. To help instructors select questions more quickly and efficiently, we have used the skill descriptors to fact, definition, conceptual, and analytical. Solutions and text pages where the solutions appear are also included.

Macroeconomics Test Bank 1. Prepared by Rashid Al-Hmoud of Texas Tech University, this test bank includes over 3,000 questions, two-thirds of which are new or updated. Types of questions include short answer, analytical, true/false, and multiple-choice.

Macroeconomics Test Bank 2. Prepared by David Findlay of Colby College, this test bank now includes 1,500 questions. Instructors can choose from a wide variety of short-answer, analytical, true/false, and multiple-choice questions.

Macroeconomics TB 3. New to the sixth edition is a third test bank, prepared by Richard Gosselin of Houston Community College. This test bank includes 1,000 short answer problems and questions. Application-type problems ask students to draw graphs and analyze tables.

COLOR TRANSPARENCIES

All figures and tables from the text are reproduced as full-page, four-color acetates.

ECONOMIC EXPERIMENTS

Using Economic Experiments, Cases, and Activities in the Classroom, Second Edition, by Dirk Yandell of the University of San Diego, features 15 classroom experiments that illustrate key economic concepts. Also included are 9 case studies and several in-class exercises of varying lengths.

E-COMMERCE GUIDE

Electronic commerce is playing an increasingly important role in how business is conducted. Prentice Hall's Guide to E-Commerce and E-Businesses provides readers with background on the history and direction of E-Commerce, the impact it has on the economy, and how to use it as a source of economic information and data. This guide can be shrink-wrapped free with a copy of the sixth edition.

ACKNOWLEDGMENTS

We are grateful to the many people who helped us prepare the sixth edition. We thank Rod Banister, Senior Editor for Economics at Prentice Hall, for his help and enthusiasm. We are also grateful to Lena Buonanno, Senior Developmental Editor, for overseeing the entire project. The quality of the book owes much to her guidance. Gladys Soto, Managing Editor, Marie McHale, Editorial Assistant, and Susan McLaughlin, indefatigability marshaled the extensive array of supplements to accompany this text.

We were very fortunate and pleased to have the talent and support of Mary Lesser of Iona Collage. Mary prepared the ActiveEcon CD-ROM, the Instructor's Manuals, and WebCT and Blackboard content and also accuracy checked the selected solutions that appear at the end of the text. Our supplement package is greatly improved due to Mary's hard work. Mike Elia, our Developmental Editor for the previous edition, worked with Mary to help ensure the accuracy and coordination of the Active Graphs with our book.

Thanks also go to Thomas Beveridge of North Carolina State University who has carefully prepared each edition of our study guides.

Cynthia Regan, our Production Managing Editor, ensured that the production process of the book went smoothly. Josh McClary, our Marketing Manager, created a great marketing campaign.

We want to thank S. Brock Blomberg of Wellesley College for his assistance in preparing the end-of-chapter Web exercises, and Maryna Marynchenko and Jenny Stack for their research assistance and proofreading of the manuscript. Special thanks to Teri Stratford for locating the dynamic photos that appear in the book.

We also owe a debt of gratitude to those who reviewed the fifth edition or attended focus groups and provided us with a valuable insight as we prepared the new edition and its supplement package:

We welcome comments about the sixth edition. Please write to us care of Economics Editor, Prentice Hall Higher Education Division, One Lake Street, Upper Saddle River, NJ 07458.

Karl E. Case
Ray C. Fair

Read More Show Less

Customer Reviews

Be the first to write a review
( 0 )
Rating Distribution

5 Star

(0)

4 Star

(0)

3 Star

(0)

2 Star

(0)

1 Star

(0)

Your Rating:

Your Name: Create a Pen Name or

Barnes & Noble.com Review Rules

Our reader reviews allow you to share your comments on titles you liked, or didn't, with others. By submitting an online review, you are representing to Barnes & Noble.com that all information contained in your review is original and accurate in all respects, and that the submission of such content by you and the posting of such content by Barnes & Noble.com does not and will not violate the rights of any third party. Please follow the rules below to help ensure that your review can be posted.

Reviews by Our Customers Under the Age of 13

We highly value and respect everyone's opinion concerning the titles we offer. However, we cannot allow persons under the age of 13 to have accounts at BN.com or to post customer reviews. Please see our Terms of Use for more details.

What to exclude from your review:

Please do not write about reviews, commentary, or information posted on the product page. If you see any errors in the information on the product page, please send us an email.

Reviews should not contain any of the following:

  • - HTML tags, profanity, obscenities, vulgarities, or comments that defame anyone
  • - Time-sensitive information such as tour dates, signings, lectures, etc.
  • - Single-word reviews. Other people will read your review to discover why you liked or didn't like the title. Be descriptive.
  • - Comments focusing on the author or that may ruin the ending for others
  • - Phone numbers, addresses, URLs
  • - Pricing and availability information or alternative ordering information
  • - Advertisements or commercial solicitation

Reminder:

  • - By submitting a review, you grant to Barnes & Noble.com and its sublicensees the royalty-free, perpetual, irrevocable right and license to use the review in accordance with the Barnes & Noble.com Terms of Use.
  • - Barnes & Noble.com reserves the right not to post any review -- particularly those that do not follow the terms and conditions of these Rules. Barnes & Noble.com also reserves the right to remove any review at any time without notice.
  • - See Terms of Use for other conditions and disclaimers.
Search for Products You'd Like to Recommend

Recommend other products that relate to your review. Just search for them below and share!

Create a Pen Name

Your Pen Name is your unique identity on BN.com. It will appear on the reviews you write and other website activities. Your Pen Name cannot be edited, changed or deleted once submitted.

 
Your Pen Name can be any combination of alphanumeric characters (plus - and _), and must be at least two characters long.

Continue Anonymously

    If you find inappropriate content, please report it to Barnes & Noble
    Why is this product inappropriate?
    Comments (optional)