Flexibility for you and quality, engaging content for your students…
The sixth edition of this benchmark Australian text continues to offer students a comprehensive and relevant introduction to economics whilst now offering you, as the instructor, the ability to customise and deliver the content the way you wish to teach it!
Through extensive revision, the book gives students an even more streamlined approach to study and recognises the difficulties some may face in comprehending key concepts. The new edition leaves the more technical content and applications until later, allowing students to enjoy the more exciting policy material from the beginning and to engage with the content early.
Through compelling examples, clear explanations and the latest instructive on-line resources, the text draws students into the content and reinforces learning through practice and solving problems which are relevant to them. The authors train students to think about issues in the way real economists do, and learn how to explore difficult policy problems and make more informed decisions by offering a clear introduction to theory and applying the concepts to today’s events, news, and research.
Part 1: INTRODUCTION
1. What is Economics?
2. The Economic Problem
3. Demand and Supply
Part 2: HOW MARKETS WORK
5. Efficiency and Equity
6. Government Actions in Markets
7. Global Markets in Action
8. Public Choices and Public Goods
9. Economics of the Environment
10. Monopoly and its Regulation
11. Economic Inequality
Part 3: DECISIONS AND STRATEGIES IN MARKETS
12. Consumer Choices and Constraints
13. Producer Choices and Constraints
14. Perfect Competition
15. Monopolistic Competition
16. Oligopoly Games and Strategy
17. Decisions in Factor Markets
Key content changes to the sixth edition
In addition to being thoroughly updated and revised to include the topics and features just described, the microeconomics chapters feature the following eight major changes:
1. Sequence of Chapters
Following an introduction that covers what economics is about, the economic problem, demand and supply, and elasticity, this new edition organizes microeconomics in two parts: How Markets Work, and Decisions and Strategies in Markets. The first part opens with the chapter on Efficiency and Equity, which lays of the agenda for the remaining chapters in the part. Subsequent chapters apply the demand and supply model, along with the interpretation of the demand and supply curves as (respectively) marginal benefit and marginal costcurves, to study all the reasons for market failure and the policy responses to those failures. The second part does the more technical material on the decisions that lie behind demand and supply.
2. Global Markets in Action (Chapter 7)
This chapter contains a new section on the effects of import quotas on an exporting country. The idea is to explain how, for example, U.S. import quotas on Australian beef and other products impact producers and consumers in Australia.
3. Public Choices and Public Goods (Chapter 8)
This chapter, new to the sixth edition, has its origins in parts of Chapters 15, 16, and 17 of the fifth edition. The chapter explains the public choice approach to understanding the political market place, the challenge of providing efficient quantities of public goods and mixed goods, and the range of possible public choice outcomes. The chapter combines both public goods and mixed goods with external benefits. The explanation of the free-rider problem created by public goods has been reworked with fire protection as the running example. The analysis is illustrated with an application to the Victorian bushfires of 2009.
4. Economics of the Environment (Chapter 9)
Another new chapter to the sixth edition, this one with origins in Chapters 16 and 17 of the fifth edition but with the material reworked to make it fit together. The chapter explains the main environmental issues—pollution/carbon emission and overuse of public resources—and features the Garnaut report and global warming. The Reading Between the Lines application examines emissions permit trading schemes.
5. Monopoly and its Regulation (Chapter 10)
To explain the problem of monopoly before a full technical chapter on cost curves required substantial revision of the monopoly chapter (Chapter 11 in the fifth edition). We explain the basic bits of the cost curves needed to understand monopoly, and we tie monopoly to Chapter 9 on the political marketplace by connecting rent seeking with lobbying and other political action. The chapter has an application on information-age natural monopolies. A new final section to this chapter explains monopoly policy and shows how price cap regulation that creates a shortage in a competitive market can help to achieve efficiency in a monopoly market.
6. Consumer Choices and Constraints (Chapter 12)
The chapter on consumer choice has a new application on consumer choices in the market for recorded music, in which digital downloads have almost driven out CD purchases. This massive substitution is used to illustrate the predictions of consumer theory. The chapter also includes an explanation of new behavioural economics and neuroeconomics approaches to understanding choice.
7. Monopolistic Competition (Chapter 15)
This chapter now covers only monopolistic competition and has new updated examples of advertising and market shares.
8. Oligopoly Games and Strategies (Chapter 16)
All the oligopoly models now appear in one chapter. The chapter provides new data on market shares and the prevalence of duopoly in Australia. The full chapter coverage on competition policy has been replaced with a shorter version at the end of this chapter.
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