Customization

Principles of Microeconomics 2e is licensed under a Creative Commons Attribution 4.0 International (CC BY) license, which means that you can distribute, remix, and build upon the content, as long as you provide attribution to OpenStax and its content contributors.

Because our books are openly licensed, you are free to use the entire book or pick and choose the sections that are most relevant to the needs of your course. Feel free to remix the content by assigning your students certain chapters and sections in your syllabus, in the order that you prefer. You can even provide a direct link in your syllabus to the sections in the web view of your book.

Instructors also have the option of creating a customized version of their OpenStax book. The custom version can be made available to students in low-cost print or digital form through their campus bookstore. Visit the Instructor Resources section of your book page on OpenStax.org for more information.

Errata

All OpenStax textbooks undergo a rigorous review process. However, like any professional-grade textbook, errors sometimes occur. Since our books are web based, we can make updates periodically when deemed pedagogically necessary. If you have a correction to suggest, submit it through the link on your book page on OpenStax.org. Subject matter experts review all errata suggestions. OpenStax is committed to remaining transparent about all updates, so you will also find a list of past errata changes on your book page on OpenStax.org.

Format

You can access this textbook for free in web view or PDF through OpenStax.org, and for a low cost in print.

Coverage and scope

To develop the first edition of Principles of Microeconomics, we acquired the rights to Timothy Taylor’s Principles of Economics and solicited ideas from economics instructors at all levels of higher education, from community colleges to PhD-granting universities. For the second edition, we received even more expansive and actionable feedback from hundreds of adopters who had used the book for several academic terms. These knowledgeable instructors informed the pedagogical courses, learning objective development and fulfillment, and the chapter arrangements. Faculty who taught from the material provided critical and detailed commentary.

The result is a book that covers the breadth of economics topics and also provides the necessary depth to ensure the course is manageable for instructors and students alike. We strove to balance theory and application, as well as the amount of calculation and mathematical examples.

The book is organized into five main parts:

• What is Economics? The first two chapters introduce students to the study of economics with a focus on making choices in a world of scarce resources.
• Supply and Demand, Chapters 3 and 4, introduces and explains the first analytical model in economics–supply, demand, and equilibrium–before showing applications in the markets for labor and finance.
• The Fundamentals of Microeconomic Theory, Chapters 5 through 10, begins the microeconomics portion of the text, presenting the theories of consumer behavior, production and costs, and the different models of market structure, including some simple game theory.
• Microeconomic Policy Issues, Chapters 11 through 18, covers the range of topics in applied micro, framed around the concepts of public goods and positive and negative externalities. Students explore competition and antitrust policies, environmental problems, poverty, income inequality, and other labor market issues. The text also covers information, risk and financial markets, and public economy.
• International Economics, Chapters 19 and 20, introduces the international dimensions of economics, including international trade and protectionism.

Alternate sequencing Principles of Microeconomics 2e was conceived and written to fit a particular topical sequence, but it can be used flexibly to accommodate other course structures. One such potential structure, which fits reasonably well with the textbook content, is provided. Please consider, however, that the chapters were not written to be completely independent, and that the proposed alternate sequence should be carefully considered for student preparation and textual consistency.

Chapter 1 Welcome to Economics!

Chapter 2 Choice in a World of Scarcity

Chapter 3 Demand and Supply

Chapter 4 Labor and Financial Markets

Chapter 5 Elasticity

Chapter 6 Consumer Choices

Chapter 19 International Trade

Chapter 7 Cost and Industry Structure

Chapter 12 Environmental Protection and Negative Externalities

Chapter 13 Positive Externalities and Public Goods

Chapter 8 Perfect Competition

Chapter 9 Monopoly

Chapter 10 Monopolistic Competition and Oligopoly

Chapter 11 Monopoly and Antitrust Policy

Chapter 14 Labor Markets and Income

Chapter 15 Poverty and Economic Inequality

Chapter 16 Information, Risk, and Insurance

Chapter 17 Financial Markets

Chapter 18 Public Economy

Chapter 20 Globalization and Protectionism

Appendix A The Use of Mathematics in Principles of Economics

Appendix B Indifference Curves

Appendix C Present Discounted Value

Changes to the second edition

OpenStax only undertakes revisions when significant modifications to a text are necessary. In the case of Principles of Microeconomics, we received a wealth of constructive feedback. Many of the book’s users felt that consequential movement in economic data, coupled with the impacts of national and global events, warranted a full revision. We also took advantage of the opportunity to improve the writing and sequencing of the text, as well as many of the calculation examples. The major changes are summarized below.

• Augmented explanations in chapters one through four provide a more comprehensive and informative foundation for the book.
• A clearer explanation, using a numerical example, has been given for finding the utility maximizing combination of goods and services a consumer should choose.
• The labor markets chapter and the poverty and economic inequality chapter have been resequenced.
• Substantial revisions to the AD/AS model in chapters 24-26 present the core concepts of macroeconomics in a clearer, more dynamic manner.
• Case studies and examples have been revised and, in some cases, replaced to provide more relevant and useful information for students.
• Economic data, tables, and graphs, as well as discussion and analysis around that data, have been thoroughly updated.

Wherever possible, data from the Federal Reserve Economic Database (FRED) was included and referenced. In most of these uses, links to the direct source of the FRED data are provided, and students are encouraged to explore the information and the overall FRED resources more thoroughly.

Additional updates and revisions appear throughout the book. They reflect changes to economic realities and policies regarding international trade, taxation, insurance, and other topics. For issues that may change in the months or years following the textbook’s publication, the authors often provided a more open-ended explanation, but we will update the text annually to address further changes.

The revision of Principles of Microeconomics was undertaken by Steven Greenlaw (University of Mary Washington) and David Shapiro (Pennsylvania State University), with significant input by lead reviewer Daniel MacDonald (California State University, San Bernardino).

Pedagogical foundation

Throughout Principles of Microeconomics 2e, you will find features that engage the students in economic inquiry and support their learning. Our features include:

• Bring It Home. This feature presents a brief case study, specific to each chapter, which connects the chapter’s main topic to the real world. It is broken up into two parts: the first at the beginning of the chapter (in the Intro module) and the second at chapter’s end, when students have learned what’s necessary to understand the case and “bring home” the chapter’s core concepts.
• Work It Out. This feature asks students to work through a generally analytical or computational problem, and guides them step-by-step to find out how its solution is derived.
• Clear It Up. This feature addresses common student misconceptions about the content. Clear It Ups are usually deeper explanations of something in the main body of the text. Each CIU starts with a question. The rest of the feature explains the answer.
• Link It Up. This feature offers a very brief introduction to a website that is pertinent to students’ understanding and enjoyment of the topic at hand.

Questions for each level of learning

Principles of Microeconomics 2e offers four types of end-of-module questions for students.

• Self-Checks. These analytical self-assessment questions appear at the end of each module. They push the student to think beyond what is said in the text. Self-Check questions are designed for formative (rather than summative) assessment. The questions and answers are explained so that students feel like they are being walked through the problem.
• Review Questions. These are simple recall questions from the chapter and are in open-response format (not multiple choice or true/false). The answers can be looked up in the text.
• Critical Thinking Questions. These higher-level, conceptual questions ask students to demonstrate their understanding by applying what they have learned in different contexts. They ask for outside-the-box thinking, for reasoning about the concepts. They push the student to places they wouldn’t have thought of going themselves.
• Problems. These exercises give students additional practice working with the analytic and computational concepts in the module.

Updated art

Principles of Microeconomics 2e includes an updated art program to better inform today’s student, providing the latest data on covered topics.

Student and instructor resources

We’ve compiled additional resources for both students and instructors, including Getting Started Guides, an instructor solution manual, test bank, and PowerPoint slides. Instructor resources require a verified instructor account, which you can apply for when you log in or create your account on OpenStax.org. Take advantage of these resources to supplement your OpenStax book.

Community Hubs

OpenStax partners with the Institute for the Study of Knowledge Management in Education (ISKME) to offer Community Hubs on OER Commons – a platform for instructors to share community-created resources that support OpenStax books, free of charge. Through our Community Hubs, instructors can upload their own materials or download resources to use in their own courses, including additional ancillaries, teaching material, multimedia, and relevant course content. We encourage instructors to join the hubs for the subjects most relevant to your teaching and research as an opportunity both to enrich your courses and to engage with other faculty.

To reach the Community Hubs, visit www.oercommons.org/hubs/OpenStax.

Technology partners

As allies in making high-quality learning materials accessible, our technology partners offer optional low-cost tools that are integrated with OpenStax books. To access the technology options for your text, visit your book page on OpenStax.org.

Development editor

Thomas Sigel

Contributing authors

Eric Dodge, Hanover College

Cynthia Gamez, University of Texas at El Paso

Andres Jauregui, Columbus State University

Diane Keenan, Cerritos College

Dan MacDonald, California State University, San Bernardino

Amyaz Moledina, The College of Wooster

Craig Richardson, Winston-Salem State University

Ralph Sonenshine, American University

Reviewers

Bryan Aguiar, Northwest Arkansas Community College

Basil Al Hashimi, Mesa Community College

Jennifer Ball, Washburn University

Emil Berendt, Mount St. Mary’s University

Zena Buser, Adams State University

Douglas Campbell, The University of Memphis

Sanjukta Chaudhuri, University of Wisconsin-Eau Claire

Xueyu Cheng, Alabama State University

Robert Cunningham, Alma College

Rosa Lea Danielson, College of DuPage

Steven Deloach, Elon University

Debbie Evercloud, University of Colorado Denver

Sal Figueras, Hudson County Community College

Reza Ghorashi, Richard Stockton College of New Jersey

Robert Gillette, University of Kentucky

George Jones, University of Wisconsin-Rock County

Charles Kroncke, College of Mount St. Joseph

Teresa Laughlin, Palomar Community College

Carlos Liard-Muriente, Central Connecticut State University

Heather Luea, Kansas State University

Charles Meyrick, Housatonic Community College

William Mosher, Nashua Community College

Michael Netta, Hudson County Community College

Nick Noble, Miami University

Joe Nowakowski, Muskingum University

Shawn Osell, University of Wisconsin, Superior

Mark Owens, Middle Tennessee State University

Sonia Pereira, Barnard College

Brian Peterson, Central College

Jennifer Platania, Elon University

Robert Rycroft, University of Mary Washington

Adrienne Sachse, Florida State College at Jacksonville

Hans Schumann, Texas A&M University

Gina Shamshak, Goucher College

Chris Warburton, John Jay College of Criminal Justice, CUNY

Mark Witte, Northwestern University

Chiou-nan Yeh, Alabama State University