Principles of Economics

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Product Overview

Authors

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.

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.

Discover What's Inside! Click here to review a sample chapter, Chapter 11: Unemployment, from Stevenson and Wolfer's Principles of Macroeconomics, Third Edition.

Preface
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

Glossary
Index

Product Updates

New to the Third Edition

NEW Consumer Choice Appendix: A Deeper Dive into Consumer Choice — Budget Constraints and Indifference Curves
Updates to International Trade, Elasticity, Wages, and Market Structures chapters: Includes up-to-date data and new examples
Updates to GDP, Unemployment, Inflation, Investment, and Monetary & Fiscal Policy chapters: Includes up-to-date data, new examples, and expanded coverage
New and updated teaching materials: End-of-chapter questions, adaptive quiz content, and instructor presentation materials in updated chapters
New interactive content: Decision Points (since 2e), Math & Graphing Tutorials, and Interactive Graph Assessments

Coming Fall 2025: Updated Content for Today’s Economy

Chapter 12: Why Wages Vary—Workers, Jobs, Institutions, and Discrimination and Chapter 14: Market Structure and Degrees of Market Power will be fully refreshed to reflect the latest data, economic conditions, and policy landscape.

These updates ensure students engage with timely, relevant content that mirrors the real-world economy they’re preparing to enter. Alongside the revised eBook chapters, all supporting materials—including the adaptive quiz, assessment questions, instructor slides, and teaching resources—will be updated to align with the new content. Everything will be ready for use in Fall 2025 classes.

Spring 2025 Updates

Achieve now features a set of new interactive graphing questions. These questions cover over 25 key Principles topics, with 2-5 questions per topic. By engaging with economic models as they work through a variety of question types, students will deepen their understanding of core principles and develop critical thinking skills.

These new questions are in the Achieve question bank, ready to be included in any assignment.

There are three new Decision Point Activities for Chapters 1, 7, and 9. (Intro, Welfare, and Int’l Trade). These activities are interactive exercises designed to help students apply economic principles to real-life decision-making scenarios. Accessible through Macmillan's Achieve platform, these activities guide students step-by-step through various choices, offering immediate feedback on how economic concepts influence their decisions. By engaging with these scenarios, students can better understand and internalize economic reasoning, making the subject matter more relevant and applicable to their everyday lives.

Winter 2024 Updates

The updated Econ Math and Graphing Tutorials in Achieve bridge foundational math gaps for economics students through revamped, interactive modules featuring modern videos, algorithmically generated questions, and improved assessments designed to deepen understanding and reflection. Comprehensive accessibility features ensure that all students can effectively engage with the material.

This materials covers 10 foundational areas including Slope, Graphs, Percent Change, Ratios, Linear Equations, Averages, and more.

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.

Authors

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.

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.

Discover What's Inside! Click here to review a sample chapter, Chapter 11: Unemployment, from Stevenson and Wolfer's Principles of Macroeconomics, Third Edition.

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

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

Glossary
Index

Product Updates

New to the Third Edition

NEW Consumer Choice Appendix: A Deeper Dive into Consumer Choice — Budget Constraints and Indifference Curves
Updates to International Trade, Elasticity, Wages, and Market Structures chapters: Includes up-to-date data and new examples
Updates to GDP, Unemployment, Inflation, Investment, and Monetary & Fiscal Policy chapters: Includes up-to-date data, new examples, and expanded coverage
New and updated teaching materials: End-of-chapter questions, adaptive quiz content, and instructor presentation materials in updated chapters
New interactive content: Decision Points (since 2e), Math & Graphing Tutorials, and Interactive Graph Assessments

Coming Fall 2025: Updated Content for Today’s Economy

Spring 2025 Updates

These new questions are in the Achieve question bank, ready to be included in any assignment.

Winter 2024 Updates

This materials covers 10 foundational areas including Slope, Graphs, Percent Change, Ratios, Linear Equations, Averages, and more.

Summer 2024 Updates:

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):

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.

Third Edition Publishing December 19th, 2025!

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 our AI Student Tutor that uses the Socratic Method to help students use AI to solve economics problems and deepen their understanding of the material while completed assigned work.

The Third Edition will publish on December 19th, 2025 and Achieve courses will automatically update with updated content, data, and assessment options. Professors will not be required to build a new course; these updates will appear automatically. The Achieve ISBN for student purchase and ordering will also remain the same as the Second edition.

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.