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Discovery Guide

N. GREGORY MANKIW

Dear Colleague,

The Discovery Guide you hold in your hands was designed to give you a quick preview of the instructor and student resources available for the Sixth Editions of my textbooks: Principles of Economics Principles of Macroeconomics Principles of Microeconomics Brief Principles of Macroeconomics Essentials of Economics I have long believed that the primary goal of teaching introductory economics is to produce better citizens. After studying economics, students can better understand the news they hear, can make better decisions as they go about their lives, and can make better choices when they enter the voting booth. I am honored and delighted that my textbooks have played a role in conveying the insights of our field to the next generation. Together, the various versions of my texts have sold more than two million copies around the world, and they have been translated into twenty foreign languages. The emails I receive from students every day remind me of how much learning economics can fundamentally alter the way a person views the world. The book has once again been updated to deal with an ever-changing world. Much has happened during the past few years; indeed, when the last edition was sent to the printer, Barack Obama had yet to receive the Democratic nomination for president! Here is a small sampling of the many new topics discussed in this edition: · In 2008, oil prices skyrocketed, inducing a variety of expected and unexpected incentive effects. (Chapter 1) · In 2009, the Obama administration imposed tariffs on imports of tires from China, and China responded by putting tariffs on U.S. chicken exports to China. (Chapter 9) · Congress debated a cap-and-trade law aimed at curbing the emission of greenhouse gases. (Chapter 10) · President Obama vowed to pursue a more activist antitrust policy than his predecessor. (Chapter 15) · As unemployment rose during the recession of 2008 and 2009, policymakers reexamined the proper scope of unemployment insurance. (Chapter 28) · Problems in the banking system highlighted the role of leverage and bank capital. (Chapter 29) · The Federal Reserve introduced new tools for monetary policy, including the Term Auction Facility and interest on reserves. (Chapter 29) · President Obama's stimulus bill reignited the debate over fiscal policy multipliers (Chapter 34) Along with these, you will find scores of other revisions that keep the book as up-to-date as possible. I hope you find this Discovery Guide to be a useful resource as you determine which support materials work best for you and your course. Sincerely, Greg Mankiw

Mankiw

DISCOVERY GUIDE FOR

Experience

The Art of Instruction, The Power of Engagement, The Spark of Discovery

Principles of Economics,

Sixth Edition, by N. Gregory Mankiw

Sparking discovery while helping to form students into engaged, aware participants in the world economy is a goal of most teachers of economics. Instruction is truly an art and a gift that you give to the future. The process is one that, at its best, is an active and engaged collaboration between teacher and learner; each using the best tools available. Principles of Economics quickly became a best seller after its introduction and continues to be the most widely used text in the world because a superb writer and economist understood that true learning is a collaborative effort and he created the right tools to make the process possible. N. Gregory Mankiw's Principles of Economics stresses the most important concepts without overwhelming students with an excess of detail--a formula widely imitated, but yet to be matched!

TABLE OF CONTENTS

The Art of Instruction: Page 2­5

Premium teaching tools including test bank, instructor's manual, and videos.

The Power of Engagement: Page 6­9

Online homework solutions and engaging study tools including ApliaTM, CengageNOW, CourseMate, and The Watch.

The Spark of Discovery: Page 10­12

Feature and content updates to the 6th edition.

Table of Contents: Page 13­15 The Mankiw Community: Page 16

www.cengage.com/economics/mankiw

Instruction

The Mankiw experience offers three choices of PowerPoint®:

Premium slides offer examples and classroom ideas which go beyond what is included in the book to enhance the value of classroom discussion; Lecture Slides cover the highlights from the book; Exhibit slides include the graphs and visuals directly from the book.

The Art of

The art of teaching is the art of assisting discovery.

­ Mark Van Doren

Teaching resources and ancillaries are one of the central features of the Mankiw experience. Mankiw is the only principles text that uses a team of instructor/ancillary preparers, many of whom have been involved since the first edition. No other publisher invests as heavily as we do to ensure that our materials are worthy of the effort that you put into teaching.

P R E M I U M T E A C H I N G T O O L S F O R C L A S S R O O M P R E S E N TAT I O N S

Exhibit PowerPoint®

These slides are available to enhance your lectures. This exhibit presentation provides all tables and graphs from the main text. The slides are available on the IRCD or online at the text website.

Premium PowerPoint®

Created by economist Ron Cronovich of Carthage College, these chapter-by-chapter PowerPoint® slides are designed to ease your course preparation time while increasing student involvement in the classroom. The Premium PowerPoint lecture points are "chunked" into sections that are easily digestible to students and animate graphs the way you might draw them on a blackboard.

Traditional Lecture PowerPoint®

Available only on the product support website and the IRCD, this comprehensive lecture presentation saves you valuable time as you prepare for class. This supplement covers all essential chapter topics. Graphs, tables, lists, and concepts are developed sequentially, much as you might develop them on a blackboard.

This slide example was taken from the Traditional Lecture PowerPoint Slides.

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Instruction

P R E M I U M T E A C H I N G T O O L S F O R T E S T P R E PA R AT I O N

The Art of

Test Bank

Over 13,000 Quality Test Questions Daniel K. Biederman (University of North Dakota), Ken Brown (University of Northern Iowa), Sarah Cosgrove (University of Massachusetts, Dartmouth), David Flynn (University of North Dakota), Lisa Jepsen (University of Northern Iowa), Bryce Kanago (University of Northern Iowa), and Ken McCormick (University of Northern Iowa) have updated and revised the Test Bank. The Mankiw Test Bank consists of more than 250 questions per chapter. Every question has been checked to ensure the accuracy and clarity of the answer, and questions have been thoroughly revised to address the main text revisions. Included are true/false, multiple-choice, and short-answer questions that assess students' critical thinking skills. Easy, medium, and difficult questions outline the process that students must use to arrive at their answers: recall, application, and integration. Questions are organized by text section to help you pick and choose your selections with ease. All questions are tagged to AACSB learning standards so that student outcomes can be measured as needed by your department/university.

Chapter 1/Ten Principles of Economics 63. 19 Traci is planning to sell her house, and she is considering making two upgrades to the house before listing it for sale. Replacing the carpeting will cost her $3,000 and replacing the roof will cost her $6,000. Traci expects the new carpeting to increase the value of her house by $2,500 and the new roof to increase the value of her house by $7,500. a. Traci should make both improvements to her house. b. Traci should replace the carpeting but not replace the roof. c. Traci should replace the roof but not replace the carpeting. d. Traci should not make either improvement to her house. DIF: 1 REF: 1-1 LOC: Marginal costs & benefits TOP: Marginal changes

ExamView® Computerized Testing Software

ExamView® Computerized Testing Software contains all of the questions in the printed test bank. This easy-to-use test creation software is compatible with Microsoft Windows®. (A Mac version also is available upon request.) You can add or edit questions, instructions, and answers and select questions by previewing them on the screen, select them randomly, or select them by other criteria (difficulty level, topic, etc.). You also can create and administer quizzes online, whether over the Internet, a local area network (LAN), or a wide area network (WAN).

ANS: C NAT: Analytic MSC: Applicative 64.

Sue drinks three sodas during a particular day. The marginal benefit she enjoys from drinking the third soda a. can be thought of as the total benefit Sue enjoys by drinking three sodas minus the total benefit she would have enjoyed by drinking just two sodas. b. determines Sue's willingness to pay for the third soda. c. is likely different from the marginal benefit provided to Sue by the second soda. d. All of the above are correct. DIF: 3 REF: 1-1 LOC: Marginal costs & benefits TOP: Marginal changes

ANS: D NAT: Analytic MSC: Applicative 65.

A construction company has built 50 houses so far this year at a total cost to the company of $8 million. If the company builds a 51st house, its total cost will increase to $8.18 million. Which of the following statements is correct? a. For the first 50 houses, the average cost per house was $160,000. b. The marginal cost of the 51st house, if it is built, will be $180,000. c. If the company can experience a marginal benefit of $190,000 by building the 51st house, then the company should build it. d. All of the above are correct.

ANS: D DIF: 3 REF: 1-1 NAT: Analytic LOC: Marginal costs & benefits TOP: Marginal cost | Marginal benefit MSC: Applicative 66. Mike has spent $500 purchasing and repairing an old fishing boat, which he expects to sell for $800 once the repairs are complete. Mike discovers that, in addition to the $500 he has already spent, he needs to make an additional repair, which will cost another $400, in order to make the boat worth $800 to potential buyers. He can sell the boat as it is now for $300. What should he do? a. He should sell the boat as it is now for $300. b. He should keep the boat since it would not be rational to spend $900 on repairs and then sell the boat for $800. c. He should complete the repairs and sell the boat for $800. d. It does not matter which action he takes; the outcome is the same either way. DIF: 3 REF: 1-1 LOC: Marginal costs & benefits TOP: Marginal cost

ANS: C NAT: Analytic MSC: Analytical

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The Art of Instruction: Premium Teaching Tools

Instruction

P R E M I U M T E A C H I N G T O O L S F O R C L A S S R O O M P R E PA R AT I O N

The Art of

Instructor's Resource CD-ROM

Included on this CD set are the key supplements designed to aid instructors: Mankiw 6e Discovery Guide, Instructor's Manual with Solutions Manual and Classroom Activities, Transparency Masters, and the Test Bank in both ExamView® Computerized Testing Software and Microsoft Word. Also included are the Traditional and Exhibit-only PowerPoint slides (the Mankiw Premium PowerPoint are available on a separate CD).

Instructor's Manual with Solutions Manual

Prepared by Linda S. Ghent, Eastern Illinois University, the sixth edition offers a detailed outline for each chapter of the text that provides learning objectives, identifies stumbling blocks that students may face and offers helpful teaching tips, and provides suggested in-classroom activities for a more "cooperative learning" experience. The manual also includes solutions to all end-of-chapter exercises, Quick Quizzes, Questions for Review, and Problems and Applications found in the text. It is also available online and on the Instructor's Resource CD.

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Chapter 1/Ten Principles of Economics

KEY POINTS:

x The fundamental lessons about individual decisionmaking are that people face trade-offs among alternative goals, that the cost of any action is measured in terms of forgone opportunities, that rational people make decisions by comparing marginal costs and marginal benefits, and that people change their behavior in response to the incentives they face. The fundamental lessons about interactions among people are that trade and interdependence can be mutually beneficial, that markets are usually a good way of coordinating economic activity among people, and that the government can potentially improve market outcomes by remeding a market failure or by promoting greater economic equality. The fundamental lessons about the economy as a whole are that productivity is the ultimate source of living standards, that growth in the quantity of money is the ultimate source of inflation, and that society faces a short-run trade-off between inflation and unemployment.

x

x

CHAPTER OUTLINE:

I. Introduction Begin by pointing out that economics is a subject that students must confront in their daily lives. Point out that they already spend a great deal of their time thinking about economic issues: prices, buying decisions, use of their time, etc. A. The word "economy" comes from the Greek word oikonomos meaning "one who manages a household." B. This makes some sense because in the economy we are faced with many decisions (just as a household is). C. Fundamental economic problem: resources are scarce. You will want to start the semester by explaining to students that part of learning economics is understanding a new vocabulary. Economists generally use very precise (and sometimes different) definitions for words that are commonly used outside of the economics discipline. Therefore, it will be helpful to students if you follow the definitions provided in the text as much as possible. D. Definition of scarcity: the limited nature of society's resources. E. Definition of economics: the study of how society manages its scarce resources.

Because most college freshmen and sophomores have limited experiences with viewing the world from a cause-and-effect perspective, do not underestimate how challenging these principles will be for the student.

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Instruction

P R E M I U M T E A C H I N G T O O L S F O R M U LT I - M E D I A U S E

The Art of

Video: 10 Principles of Economics

Ken Witty, a talented documentary filmmaker, has produced a video series to illustrate Greg Mankiw's classic Ten Principles of Economics introduced in Chapter 1. Show these videos as interesting and visually appealing introductions to topics discussed throughout the textbook. The video is available on the text website.

Greg Mankiw Answers Key Questions Video DVD

If you would like Greg Mankiw to visit your classroom and answer key questions about difficult economics concepts, the Greg Mankiw Answers Key Questions videos are the next best thing. Mankiw covers key questions on the concepts that most often prove challenging or confusing for students, providing concise answers in an engaging format.

Economic News Videos

News Video Segments, from ABC News and BBC, deliver the "real world" right to students' desktops, giving students a context for how economic topics affect world and national events as well as their own daily lives, and helping them learn material by applying it to current events.

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The Art of Instruction: Premium Teaching Tools

Engagement

We learn best when we are engaged in the process of learning and effort is a function of success. No other publisher offers the range and quality of resources to engage students.

"Creative activity could be described as a type of learning process where teacher and pupil are located in the same individual."

­ Arthur Koestler

The Power of

ONLINE HOMEWORK SOLUTIONS

EXPERIENCE APLIA

ApliaTM

Created by economist Paul Romer for his classroom, Aplia is the best selling online economics product. In fact, Aplia is the most successful and widely used homework solution in the Economics market. Aplia provides automatically graded assignments that were written to make the most of the web medium and contain detailed immediate explanations of every question. A digital edition of the complete Mankiw textbook is embedded in the Aplia course.

ApliaText

The Mankiw Aplia product is now available with ApliaText, a complete interactive digital edition of the text embedded right into the Aplia program. Unlike a static eBook, ApliaText engages students with the same style and feel of the Internet sites students visit with animated graphs, videos embedded within each chapter, and note-taking functionality.

For complete details, visit www.aplia.com. To see a demo of ApliaText with Mankiw, visit www.cengage.com/economics/mankiw.

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Engagement

ONLINE HOMEWORK SOLUTIONS

EXPERIENCE CENGAGENOW

The Power of

CengageNOW

Ensure that your students have the understanding they need of procedures and concepts they need to know with CengageNOW for Mankiw 6e. This integrated, online course management and learning system combines the best of current technology to save time in planning and managing your course and assignments. You can reinforce comprehension with customized student learning paths and efficiently test and automatically grade assignments with reports that correspond to AACSB standards. With CengageNOW, you'll find: · End-of-chapter questions are included and can be assigned as homework. · A diagnostic Personalized Study Plan identifies troublesome concepts for individual students and creates student-specific study plans for better class preparations and grades. · All questions are clearly identified by AACSB standards. · Access to EconApps, Graphing Workshop, Quizzes, Mankiw's Ten Principles of Economics Videos, Greg Mankiw Answers Key Questions Videos, Student PowerPoint handouts, and the Mankiw Blog Map. · CengageNOW is compatible with your current Learning Management System, such as Blackboard® or WebTutorTM. Find out more at www.cengage.com/now.

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The Power of Engagement: Online Homework Solutions

Engagement

ENGAGING STUDY TOOLS

E X P E R I E N C E E C O N O M I C S C O U R S E M AT E

The Power of

Economics CourseMate: Engaging, Trackable, Affordable

Economics CourseMate brings course concepts to life with interactive learning, study, and exam preparation tools that support the printed textbook. Watch student comprehension soar as your class works with the printed textbook and the text-specific website. Economics CourseMate goes beyond the book to deliver what you need! Engagement Tracker: How do you know your students have read the material or viewed the resources you've assigned? Engagement Tracker assesses student preparation and engagement. Use the tracking tools to see progress for the class as a whole or for individual students. Identify students at risk early in the course. Uncover which concepts are most difficult for your class. Monitor time on task. Keep your students engaged. Interactive Teaching and Learning Tools: Economics CourseMate provides interactive teaching and learning tools including: · Quizzes · Flashcards · Videos · Graphing Tutorials · News, Debates, and Data Interactive eBook: In addition to interactive teaching and learning tools, Economics CourseMate includes an interactive eBook. Students can take notes, highlight, search and interact with embedded media specific to their book. Go to login.cengage.com to access these resources within CourseMate.

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Engagement

CURRENT EVENTS FOR CLASS DISCUSSION

E X P E R I E N C E T H E W AT C H

The Power of

The Global Economic Watch

The Watch, a groundbreaking resource, stimulates discussion and understanding of the global downturn with easy-tointegrate teaching solutions: · A content-rich blog of breaking news, expert analysis, and commentary--updated multiple times daily. · A powerful real-time database of hundreds of relevant and vetted journal, newspaper, and periodical articles, videos, and podcasts--updated four times every day. · A thorough overview and timeline of events leading up to the global economic crisis. · Discussion and testing content, PowerPoint slides on key topics, sample syllabi, and other teaching resources. For more information, visit www.cengage.com/thewatch.

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The Power of Engagement: Engaging Study Tools and Current Events

Discovery

U P D AT E S T O T H E 6 T H E D I T I O N

Along with the crystal-clear writing style, this edition fully incorporates the most current information and analysis of the current economics environment. · Extensively updated coverage of areas impacted by the financial crisis, including a discussion of the downturn in the chapter on "Aggregate Demand and Aggregate Supply" and an expanded discussion of how the Fed influences the money supply in the chapter on "The Influence of Monetary and Fiscal Policy on Aggregate Demand."

The Spark of

"A mighty flame followeth a tiny spark."

­ Dante

Greg Mankiw is one of the best writers in economics both for the academic audience and for the general public. Nobody illuminates and clarifies economics like Mankiw.

EXPERIENCE MANKIW: SUPERIOR WRITING AND CONTENT

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Discovery

U P D AT E S T O T H E 6 T H E D I T I O N

EXPERIENCE MANKIW: SUPERIOR WRITING AND CONTENT · Updated coverage and examples reflecting current economic conditions abound throughout and also include fully updated data in the chapter "The Design of the Tax System," along with coverage of the Obama Administration health care reform bill. All data and figures in the chapter "Income Inequality and Poverty" are also completely updated. · The final macroeconomic chapter now includes Six Debates over Macroeconomic Policy, with the new sixth topic covering spending increases versus tax cuts to fight recessions.

The Spark of

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The Spark of Discovery: Updates to the 6th Edition

Discovery

U P D AT E S T O T H E 6 T H E D I T I O N

· Dozens of new applications throughout emphasize the real-world relevance of economics for today's students through interesting articles, realistic case studies, and engaging problems. Many new In The News, Case Study, and FYI features reflect the most current data and news stories that keep students talking. A few examples of the new applications include: ­ In the News: The Economics of President Obama ­ In the News: Should Unpaid Internships Be Allowed? ­ In the News: The Case for Toll Roads ­ In the News: President Obama's Antitrust Policy ­ In the News: The Next Big Antitrust Target? ­ FYI: Financial Crises ­ In the News: How Much Do the Unemployed Respond to Incentives? ­ FYI: Hyperinflation in Zimbabwe ­ Case Study: The Recession of 2008­2009 ­ FYI: Inflation Targeting

The Spark of

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Contents

PRINCIPLES OF ECONOMICS, 6E

Part One: Introduction Part Seven: Topics for Further Study

Table of

1 Ten Principles of Economics 2 Thinking Like an Economist 3 Interdependence and the Gains from Trade

Part Two: How Markets Work

21 The Theory of Consumer Choice 22 Frontiers of Microeconomics

Part Eight: The Data of Macroeconomics

4 The Market Forces of Supply and Demand 5 Elasticity and Its Application 6 Supply, Demand, and Government Policies

Part Three: Markets and Welfare

23 Measuring a Nation's Income 24 Measuring the Cost of Living

Part Nine: The Real Economy in the Long Run

7 Consumers, Producers, and the Efficiency of Markets 8 Application: The Costs of Taxation 9 Application: International Trade

Part Four: The Economics of the Public Sector

25 Production and Growth 26 Saving, Investment, and the Financial System 27 The Basic Tools of Finance 28 Unemployment and Its Natural Rate

Part Ten: Money and Prices in the Long Run

10 Externalities 11 Public Goods and Common Resources 12 The Design of the Tax System

Part Five: Firm Behavior and the Organization of Industry

29 The Monetary System 30 Money Growth and Inflation

Part Eleven: The Macroeconomics of Open Economics

31 Open-Economy Macroeconomics: Basic Concepts 32 A Macroeconomic Theory of the Open Economy

Part Twelve: Short-Run Economic Fluctuations

13 The Costs of Production 14 Firms in Competitive Markets 15 Monopoly 16 Monopolistic Competition 17 Oligopoly

Part Six: The Economics of Labor Markets

18 The Markets for the Factors of Production 19 Earnings and Discrimination 20 Income Inequality and Poverty

33 Aggregate Demand and Aggregate Supply 34 The Influence of Monetary and Fiscal Policy on Aggregate Demand 35 The Short-Run Tradeoff between Inflation and Unemployment

Part Thirteen: Final Thoughts

36 Six Debates over Macroeconomic Policy

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Table of Contents

Contents

PRINCIPLES OF MICROECONOMICS, 6E

Part One: Introduction Part Five: Firm Behavior and the Organization of Industry

Table of

1 Ten Principles of Economics 2 Thinking Like an Economist 3 Interdependence and the Gains from Trade

Part Two: How Markets Work

13 The Costs of Production 14 Firms in Competitive Markets 15 Monopoly 16 Monopolistic Competition 17 Oligopoly

Part Six: The Economics of Labor Markets

4 The Market Forces of Supply and Demand 5 Elasticity and Its Application 6 Supply, Demand, and Government Policies

Part Three: Markets and Welfare

18 The Markets for the Factors of Production 19 Earnings and Discrimination 20 Income Inequality and Poverty

Part Seven: Topics for Further Study

7 Consumers, Producers, and the Efficiency of Markets 8 Application: The Costs of Taxation 9 Application: International Trade

Part Four: The Economics of the Public Sector

21 The Theory of Consumer Choice 22 Frontiers of Microeconomics

10 Externalities 11 Public Goods and Common Resources 12 The Design of the Tax System

PRINCIPLES OF MACROECONOMICS, 6E

Part One: Introduction

1 Ten Principles of Economics 2 Thinking Like an Economist 3 Interdependence and the Gains from Trade

Part Two: How Markets Work

13 Saving, Investment, and the Financial System 14 The Basic Tools of Finance 15 Unemployment and Its Natural Rate

Part Six: Money and Prices in the Long Run

4 The Market Forces of Supply and Demand 5 Elasticity and Its Application 6 Supply, Demand, and Government Policies

Part Three: Markets and Welfare

16 The Monetary System 17 Money Growth and Inflation

Part Seven: The Macroeconomics of Open Economics

18 Open-Economy Macroeconomics: Basic Concepts 19 A Macroeconomic Theory of the Open Economy

Part Eight: Short-Run Economic Fluctuations

7 Consumers, Producers, and the Efficiency of Markets 8 Application: The Costs of Taxation 9 Application: International Trade

Part Four: The Data of Macroeconomics

20 Aggregate Demand and Aggregate Supply 21 The Influence of Monetary and Fiscal Policy on Aggregate Demand 22 The Short-Run Tradeoff between Inflation and Unemployment

Part Nine: Final Thoughts

10 Measuring a Nation's Income 11 Measuring the Cost of Living

Part Five: The Real Economy in the Long Run

23 Six Debates over Macroeconomic Policy 12 Production and Growth

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Contents

BRIEF PRINCIPLES OF MACROECONOMICS, 6E

Part One: Introduction Part Five: Money and Prices in the Long Run

Table of

1 Ten Principles of Economics 2 Thinking Like an Economist 3 Interdependence and the Gains from Trade

Part Two: How Markets Work

11 The Monetary System 12 Money Growth and Inflation

Part Six: The Macroeconomics of Open Economics

4 The Market Forces of Supply and Demand

Part Three: The Data of Macroeconomics

13 Open-Economy Macroeconomics: Basic Concepts 14 A Macroeconomic Theory of the Open Economy

Part Seven: Short-Run Economic Fluctuations

5 Measuring a Nation's Income 6 Measuring the Cost of Living

Part Four: The Real Economy in the Long Run

15 Aggregate Demand and Aggregate Supply 16 The Influence of Monetary and Fiscal Policy on Aggregate Demand 17 The Short-Run Tradeoff between Inflation and Unemployment

Part Eight: Final Thoughts

7 Production and Growth 8 Saving, Investment, and the Financial System 9 The Basic Tools of Finance 10 Unemployment and Its Natural Rate

18 Six Debates over Macroeconomic Policy

ESSENTIALS OF ECONOMICS, 6E

Part One: Introduction

1 Ten Principles of Economics 2 Thinking Like an Economist 3 Interdependence and the Gains from Trade

Part Two: How Markets Work

13 Firms in Competitive Markets 14 Monopoly

Part Six: The Data of Macroeconomics

15 Measuring a Nation's Income 16 Measuring the Cost of Living

Part Seven: The Real Economy in the Long Run

4 The Market Forces of Supply and Demand 5 Elasticity and Its Application 6 Supply, Demand, and Government Policies

Part Three: Markets and Welfare

7 Consumers, Producers, and the Efficiency of Markets 8 Application: The Costs of Taxation 9 Application: International Trade

Part Four: The Economics of the Public Sector

17 Production and Growth 18 Saving, Investment, and the Financial System 19 The Basic Tools of Finance 20 Unemployment and Its Natural Rate

Part Eight: Money and Prices in the Long Run

21 The Monetary System 22 Money Growth and Inflation

Part Nine: Short-Run Economic Fluctuations

10 Externalities 11 Public Goods and Common Resources

Part Five: Firm Behavior and the Organization of Industry

23 Aggregate Demand and Aggregate Supply 24 The Influence of Monetary and Fiscal Policy on Aggregate Demand

12 The Costs of Production

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Table of Contents

Community

The Mankiw

Mankiw 6e Community Site

Visit Mankiw's community site for the 6th edition at www.cengage.com/community/mankiw. Developed to keep you tied to the pulse of economics, our community website takes your Mankiw Experience to a whole new level. This expansive resource allows you to access teaching resources, find the latest news updates, and learn more about what Mankiw 6e can do for you and your students!

And, find us on YouTube and Facebook:

The Mankiw Experience on YouTube Stay up to date with videos of Greg Mankiw, a tour of our ancillary development, your colleagues around the nation commenting on the Mankiw experience and more! Visit www.youtube.com/mankiwexperience. The Mankiw Experience Page on Facebook. Go to www.facebook.com and search for `The Mankiw Experience'.

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Economics

The study of economics has many facets, but it is unified by several central ideas. In the introductory chapter to this book, we look at Ten Principles of Economics. Don't worry if you don't understand them all at first or if you aren't completely convinced. We explore these ideas more fully in later chapters. The ten principles are introduced here to give you an overview of what economics is all about. Consider this a "preview of coming attractions."

Principle 1:

People Face Trade-offs

Ten Principles of

Principle 2:

The Cost of Something Is What You Give Up to Get It

Principle 3:

Rational People Think at the Margin

Principle 4:

People Respond to Incentives

Principle 5:

Trade Can Make Everyone Better Off

Principle 6:

Markets Are Usually a Good Way to Organize Economic Activity

Principle 7:

Governments Can Sometimes Improve Market Outcomes

Principle 8:

A Country's Standard of Living Depends on Its Ability to Produce Goods and Services

Principle 9:

Prices Rise When the Government Prints Too Much Money

Principle 10:

Society Faces a Short-Run Trade-off between Inflation and Unemployment

N. Gregory Mankiw, Harvard University

N. Gregory Mankiw is Professor of Economics at Harvard University. Professor Mankiw is a prolific writer and a regular participant in academic and policy debates. In addition to teaching, research, and writing, Mankiw has been a research associate of the National Bureau of Economic Research, an adviser to the Federal Reserve Bank of Boston and the Congressional Budget Office, and a member of the ETS test development committee for the advanced placement exam in economics. From 2003 to 2005, he served as Chairman of the President's Council of Economic Advisers.

Mankiw 6e Community Site

Visit Mankiw's community site for the 6th edition at www.cengage.com/community/mankiw. Developed to keep you tied to the pulse of economics, our community website takes your Mankiw Experience to a whole new level. Learn more about what Mankiw 6e can do for you and your students!

Blog with Mankiw ­ Greg's Posts Tied to the Text

When you visit the Mankiw Community Site, you can link directly to Greg Mankiw's blog (www.gregmankiw.blogspot.com). Mankiw uses his blog as a springboard for bringing economic insight into current events, providing advice for students at all levels, delivering a constant stream of fresh teaching ideas, and much more. Entries are mapped where appropriate to the topical section of the 6th Edition text, making this extremely popular blog a great teaching resource!

The Mankiw Experience on YouTube

Stay up to date with videos of Greg Mankiw, a tour of our ancillary development, your colleagues around the nation commenting on the Mankiw experience and more! http://www.youtube.com/user/MankiwExperience

The Mankiw Experience Page on Facebook

Log in to Facebook and Search for `The Mankiw Experience' to find our Greg Mankiw page! http://www.facebook.com

Source Code: 12M-EC0024

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