Principles of Economics

Principles of Economics

Second Edition  ©2023 Betsey Stevenson; Justin Wolfers Formats: Digital & Print


  • Photo of Betsey Stevenson

    Betsey Stevenson

    Betsey Stevenson is a professor of economics and public policy at the University of Michigan. Her research focuses on the impact of public policies on the labor market, and explores women’s labor market experiences, the economic forces shaping the modern family, and the role of subjective well-being data for public policy. She serves on the Executive Committee of the American Economic Association, and is also a research associate with the National Bureau of Economic Research, a fellow of the Institute for Economic Research in Munich, a visiting associate professor of economics at the University of Sydney, and a research Fellow with the Centre for Economic Policy Research in London. She served as a member of the Council of Economic Advisers from 2013 to 2015, where she advised President Obama on social policy, labor market, and trade issues. She also served as the chief economist of the U.S. Department of Labor from 2010 to 2011. Betsey is an occasional editorialist for Bloomberg, and a trusted presence in the public debate about economics and public policy. She earned a BA in economics and mathematics from Wellesley College and an AM and PhD in economics from Harvard University.

  • Photo of Betsey Stevenson

    Justin Wolfers

    Justin Wolfers is a professor of economics and public policy at the University of Michigan. He does research in both macroeconomics and applied microeconomics topics, and has explored unemployment and inflation, the power of prediction markets, the economic forces shaping the modern family, discrimination, and happiness. He is a research associate with the National Bureau for Economic Research, a fellow of the Brookings Institution, a fellow of the Peterson Institute for International Economics, a research fellow with the Centre for Economic Policy Research in London, a fellow of the Institute for Economic Research in Munich, a visiting professor of economics at the University of Sydney, and an international research fellow at the Kiel Institute for the World Economy in Germany. He has been an editor of the Brookings Papers on Economic Activity, a board member on the Committee on the Status of Women in Economics, a member of the Panel of Advisors of the U.S. Congressional Budget Office, among many other board and advisory positions. He is currently a contributing columnist for the New York Times , and has written about economic issues in numerous other outlets. He is frequently quoted in the media on economic policy and relied upon to provide unbiased assessments of the current state of the macroeconomy. Justin earned a BA in economics from the University of Sydney and an AM and PhD in economics from Harvard University.

Table of Contents

A Quick Review of Graphs

PART I Foundations of Economics
Chapter 1 The Four Core Principles of Economics
Chapter 2 Demand and Consumer Choice
Chapter 3 Supply and Producer Choice
Chapter 4 Equilibrium: Where Supply Meets Demand

PART II Analyzing Markets
Chapter 5 Elasticity: Measuring Responsiveness
Chapter 6 Taxes, Price Controls, and Quantity Regulations
Chapter 7 Welfare Economics: Evaluating Market Efficiency and Market Failure
Chapter 8 Comparative Advantage and Gains from Trade

PART III Applications and Policy Issues
Chapter 9 International Trade
Chapter 10 Externalities and Public Goods
Chapter 11 The Labor Market
Chapter 12 Why Wages Vary: Workers, Jobs, Institutions, and Discrimination
Chapter 13 Inequality, Poverty, and Social Insurance

PART IV Industrial Organization and Business Strategy
Chapter 14 Market Structure and Market Power
Chapter 15 Entry, Exit, and Long-Run Profitability
Chapter 16 Price Discrimination and Sophisticated Pricing Strategies
Chapter 17 Economics of Strategic Management

PART V Advanced Decisions
Chapter 18 Game Theory and Strategic Choices
Chapter 19 Decisions Involving Uncertainty
Chapter 20 Decisions Involving Private Information

Part VI Macroeconomic Foundations and the Long Run
Chapter 21 Sizing Up the Economy Using GDP
Chapter 22 Economic Growth
Chapter 23 Unemployment
Chapter 24 Inflation and Money

Part VII Micro Foundations of Macroeconomics
Chapter 25 Consumption and Saving
Chapter 26 Investment
Chapter 27 The Financial Sector: Banks, Bonds, and Stocks
Chapter 28 International Finance and the Exchange Rate

Part VIII The Business Cycle
Chapter 29 Tracking the Business Cycle
Chapter 30 Linking Interest Rates and Output Using IS-MP Analysis
Chapter 31 The Phillips Curve and Inflation
Chapter 32 The Fed Model: Putting it All Together
Chapter 33 Aggregate Demand and Aggregate Supply

Part IX Macroeconomic Policy
Chapter 34 Monetary Policy
Chapter 35 Government Spending, Taxes, and Fiscal Policy
Appendix: A Closer Look at Aggregate Expenditure and the Multiplier


Product Updates

Summer 2024 Updates:

The digital update for Stevenson/Wolfers Principles of Macroeconomics 2e includes updated analysis of the post-pandemic inflationary surge in Chapter 31: The Phillips Curve and Inflation. This content has been updated in the e-book, homework, end of chapter problems, test bank questions, LearningCurve, and Lecture Slides. We also now have a Decision Point activity on this topic.

In addition, five other new Decision Point activities have been added to the course for Chapters 1, 7, 9, 21, and 31.

Second Edition Updates (2023):

NEW “Think Like An Economist” podcast in Achieve uncovers the economic forces that shape the world around us. Created by the Authors and aligned with every text chapter, this fun and engaging podcast introduces students to the big ideas and shows them how to apply economic principles to make better decisions in their own lives. Each episode is paired with assignable assessments to ensure that students listen and understand.

NEW Interactive graphs in the Achieve e-textbook.To help students improve data literacy and understand economic models, Achieve now offers interactive graphs throughout the eBook. Students can manipulate each data graph to simulate market dynamics providing for a more engaging reading and learning experience. Instructors can include interactive graphs in their in-person and online lectures using our new Interactive Graphing Bank, found in Achieve.

NEW Homework assignments in Achieve offer targeted feedback for use in class and as homework. Designed so that students learn by doing the economics, these problems contain multiple question types including our intuitive graphing that assess students’ understanding of economics. Each chapter offers a new set of assignable, multi-step problems that complement online, auto-graded versions of the end-of-chapter problems.

Thoroughly revised with extensive coverage of the Covid19 pandemic, numerous new stories and examples, and revised headings and chapter order to make concepts even clearer.

Every Decision Is An Economic Decision

Principles of Economics is the most successful new introductory text in a generation. Betsey Stevenson and Justin Wolfers focus on useful economics helps students develop and apply economic intuition to their everyday decisions. They offer a  fresh take on a wide range of foundational topics in an engaging presentation that has drawn enthusiastic feedback from hundreds of instructors and thousands of students.

The accompanying Achieve offers an interactive e-textbook plus thousands of assignable and editable problems, LearningCurve adaptive quizzing, easy LMS integration, and the new Graphing Reserve— the first tool in almost 20 years to offer a new approach to graphing in the Principles course.

Success Stories

Here are a few examples of how Achieve has helped instructors like you improve student preparedness, enhance their sense of belonging, and achieve course goals they set for themselves.

Prof. Kiandra Johnson, Spelman College

See how the resources in Achieve help you engage students before, during, and after class.

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Here’s why educators who use Achieve would recommend it to their peers.

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Betsey Stevenson; Justin Wolfers | Second Edition | ©2023 | ISBN:9781319419936

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