In recent years, innovative texts in mathematics, science, foreign languages, and other fields have achieved dramatic pedagogical gains by abandoning the traditional encyclopedic approach in favor of attempting to teach a short list of core principles in depth. Two well-respected writers and researchers, Ben Bernanke and Nilss Olekalns, have shown that the less-is-more approach affords similar gains in introductory economics.
Although recent editions of a few other texts have paid lip service to this new approach, Bernanke & Olekalns is by far the best thought out and best executed principles text in this mould. Avoiding excessive reliance on formal mathematical derivations, it presents concepts intuitively through examples drawn from familiar contexts. The authors introduce a well-articulated short list of core principles and reinforcing them by illustrating and applying each in numerous contexts. Students are periodically asked to apply these principles to answer related questions, exercises, and problems.
The text also encourages students to become "Economic Naturalists," people who employ basic economic principles to understand and explain what they observe in the world around them. An economic naturalist understands, for example, that infant safety seats are required in cars but not in airplanes because the marginal cost of space to accommodate these seats is typically zero in cars but often hundreds of dollars in airplanes. Such examples engage student interest while teaching them to see each feature of their economic landscape as the reflection of an implicit or explicit cost-benefit calculation.
The third edition builds upon a successful approach with several pedagogical improvements. Based on reviewer feedback, this edition offers (1) even more streamlined coverage of the cost-benefit approach in the introductory chapter; (2) exercises that are more closely tied to the examples; (3) expanded narrative explanations of important principles, making them more accessible to average students; and (4) expanded coverage of several key topics [see below]. The result is a revision that is motivating to students, an effective text for teaching, and an exciting first course in Economics.
Key Features
An Emphasis on Core Principles: A few core principles do most of the work in economics. By focusing on these principles, the text assures that students leave the course with a deep mastery of them. In contrast, traditional encyclopedic texts so overwhelm students with detail that they often leave the course with little useful working knowledge at all.
Economic Naturalism Introduced: The authors' ultimate goal is to produce "economic naturalists"--people who see each human action as the result of an implicit or explicit cost-benefit calculation. The economic naturalist sees mundane details of ordinary existence in a new light and becomes actively engaged in the attempt to understand them.
? Why don't auto manufacturers make cars without heaters?
? Why are whales, but not chickens, threatened with extinction?
? Why do movie theaters give student discounts on the price of admission but not on the price of popcorn?
Active Learning Stressed: The only way to lean to hit an overhead smash in tennis or to speak a foreign language is through repeated practice. The same is true for learning economics. Thus, the authors consistently introduce new ideas in the context of simple examples and then follow them with applications showing how they work in familiar settings. And frequently, the text poses exercises that both test and reinforce the understanding of these ideas. The end-of-chapter questions and problems are carefully crafted to help students internalize and extend core concepts. Students are prepared to apply the important concepts to solve "economic riddles" drawn from the real world.
Well-Known Authors: Robert Frank and Ben Bernanke are renowned experts in their fields (micro and macro, respectively). Frank's research has looked at rivalry and cooperation in economic and social behavior. He is the author of a best-selling intermediate economics text, Microeconomics and Behavior, (McGraw-Hill/Irwin), and has published such award-winning books as The Winner-Take-All-Society and Luxury Fever. Bernanke is the co-author of a best-selling intermediate macroeconomics text and has done significant research on the causes of the Great Depression, the role of financial markets and institutions in the business cycle, and measuring the effects of monetary policy on the economy. He was just appointed to the Federal Reserve Board of Governors under Alan Greenspan.
Modern Microeconomics: Economic surplus, introduced in Chapter 1 and applied repeatedly thereafter, is more fully developed here than in any other text. This concept underlies the argument for economic efficiency as an important social goal. Rather than speak of tradeoffs between efficiency and other goals, the authors stress that maximizing economic surplus facilitates the achievement of all goals. The tendency to ignore opportunity costs, the tendency not to ignore sunk costs, and the tendency to confuse average and marginal costs and benefits?common decision pitfalls identified by 2002 Nobel Laureate Daniel Kahneman and others?are introduced early in Chapter 1. The book devotes a chapter to the economics of information, making available in intuitively accessible form key insights that earned the 2001 Nobel Prize in economics for George Akerlof, Joseph Stiglitz, and Michael Spence.
Website: Developed by Scott Simkins of North Carolina A & T State University, an expert in the growing field of Economics education on the World Wide Web. The ambitious web site contains a host of features that will enhance the principles classroom, including dynamic graphs, video lectures, e-mail updates, microeconomic experiments, current news articles, information about the text, an eLearning session, and more.
Introductory Material Shortened and Refined: The material from the First Edition?s Chapters 1 and 2 has been reworked and condensed into one chapter in an effort to launch these important concepts as clearly and efficiently as possible. From the very beginning, the focus is on how rational people make choices among alternative courses of action.
Cost Curve Coverage Added: Responding to reviewer feedback, the authors have added an introduction to average total cost and average variable cost curves in Chapter 6. Taking great pains to make the presentation as simple and uncluttered as possible, no single diagram ever portrays more than three cost curves at once, and most employ only two. This treatment remains faithful the authors' belief that a full-blown treatment of production functions and cost curves is ill advised at the principles level, while providing teachers with greater flexibility. For example, it enables instructors to discuss a firm's shut down condition graphically and to portray profits and losses graphically. It also facilitates an enriched discussion of the invisible hand process by which profit and loss signals drive resource allocation in competitive markets (Chapter 8).
Strategic Theory Accessible: Chapter 10, "Thinking Strategically," includes many examples of how simple elements of game theory can be used not only to illuminate the interactions among oligopolists and other imperfectly competitive firms, but also to shed light on common patterns of human social interaction. This chapter
? opens with an account of how the producers of a Robert DeNiro film lost several hundred thousand dollars by having already shot most of the film before negotiating with the singer who was slated to appear in the final scene.
? introduces the important Nash Equilibrium concept [as portrayed in "A Beautiful Mind"] through a series of intuitively accessible examples.
? includes an extended discussion of the important prisoner's dilemma and strategies that have been developed for solving it.
? deals with ultimatum bargaining games and unselfish human behavior.
More Streamlined Discussion of Labor Markets and Income Redistribution: Frank and Bernanke's Chapter 13 now contains material from the chapters on "Labor Markets" [13] and "Income Redistribution" [16] in the First Edition. The new chapter is half the combined length of the earlier chapters, accomplished in part by eliminating examples, in part by trimming topic coverage. Sections on monopsony and comparable worth from the original Chapter 13 and sections on utilitarianism, tax policy and occupational choice, progressive consumption taxation, and redistribution and cost-benefit analysis from the original Chapter 16 have been deleted.
Early Chapter on International Trade: The first edition had a brief section on international trade at the end of Chapter 3 on comparative advantage. This material has been expanded to an entire chapter [16] on trade. Because international trade involves important micro principles and policy issues, students will benefit greatly from this expanded coverage earlier in the book.
Online Learning Center (www.mhhe.com/economics/frankbernanke2) For teachers there are, among other things, an on-line newsletter called ?Teaching Using the Web?; the Instructor's Manual; the PowerPoints; Economics on the Web, an annotated set of URLs/links to sites of interest to economists; a graphing library; along with a description of what?s on the student site and some Optional Material from the book.
BusinessWeek Edition Your students can subscribe to 15 weeks of Business Week for a specially priced rate of $8.25 in addition to the price of the text. Students will receive a pass code card shrink-wrapped with their new text. The card directs students to a Website where they enter the code and then gain access to BusinessWeek?s registration page to enter address info and set up their print and online subscription as well. [Passcode ISBN 007-251530-9]
Wall Street Journal Edition Your students can subscribe to the Wall Street Journal for 15 weeks at a specially priced rate of $20.00 in addition to the price of the text. Students will receive a "How To Use the WSJ" handbook plus a pass code card shrink-wrapped with the text. The card directs students to a Website where they enter the code and then gain access to the WSJ registration page to enter address info and set up their print and online subscription, and also set up their subscription to Dow Jones Interactive online for the span of the 15-week period. [Passcode ISBN 007-251950-9]
Table of Contents
[Online] Economics and the market Part 1 Issues in macroeconomics
1. Measuring macroeconomic performance: output and prices
2. Measuring macroeconomic performance: saving and wealth
3. Measuring macroeconomic performance: unemployment and the labour market Part 2 Short-run macroeconomics: The analysis of the business cycle
4. Short-term economic fluctuations
5. Spending and output in the short run
6. Fiscal policy
7. Money, prices and the Reserve Bank
8. The Reserve bank and the economy (with Appendix 8)
9. The aggregate demand?aggregate supply model (with Appendices 9a, 9b and 9c) Part 3 Long-run macroeconomics: The analysis of macroeconomic growth
10. The economy in the long run: an introduction to economic growth
11. The production function approach to understanding growth
12. Savings, capital formation and comparative economic growth Part 4 Open economy macroeconomics
13. An introduction to the open economy and comparative advantage
14. Exchange rates and the open economy
15. The balance of payments?net exports and international capital flows Part 5 Concluding thoughts
16. Macroeconomics: What have we learnt?
Appendix ? Answers to in-chapter exercises
Supplements
Computerized Test Bank (Mac Version) t/a Principles of Microeconomics ISBN: 0072877286 Author(s): FRANK
DiscoverEcon Online Version t/a Principles of Economics, Micro, Macro (Codecard) ISBN: 0072868430 Author(s): FRANK
Solman Videos - VHS Cassette ISBN: 0072459999 Author(s): FRANK
Principles of Microeconomics+ DiscoverEcon Code Card+ Study Guide ISBN: 0072883308 Author(s): FRANK
DiscoverEcon Software Tutorial Folder ISBN: 0072559802 Author(s): FRANK
Solman Videos - CD ISBN: 0073032271 Author(s): FRANK
Solman Instructor DVD--For Comps ISBN: 0072919892 Author(s): FRANK
Solman Student DVD-- For Packages ISBN: 0072919906 Author(s): FRANK
Principles of Microeconomics + DiscoverEcon Online Code Card + Solman Student DVD ISBN: 0072920823 Author(s): FRANK
Instructor's Manual t/a Principles of Economics ISBN: 007255973X Author(s): FRANK
Instructor's Resource CD-ROM (IM, CTB, PPT) ISBN: 0072559756 Author(s): FRANK
Discover Econ Software Tutorial CD-ROM t/a Principles of Economics, Macro, Micro ISBN: 0072559780 Author(s): FRANK
Test Bank t/a Principles of Microeconomics ISBN: 0072825979 Author(s): FRANK
Computerized Test Bank (Win) t/a Principles of Microeconomics ISBN: 0072825987 Author(s): FRANK
PowerPoints t/a Principles of Microeconomics ISBN: 0072825995 Author(s): FRANK
Study Guide t/a Principles of Microeconomics ISBN: 0072826002 Author(s): FRANK
Overhead Transparencies t/a Principles of Microeconomics ISBN: 0072826010 Author(s): FRANK
DiscoverEcon Tutorial Software Pack (CD+ User's Manual) t/a Principles of Economics, Macro, Micro ISBN: 0072872241 Author(s): FRANK
