Micro-Economics

When I was a student, I fell in love with microeconomics because it cleared up many mysteries about the world and provided the means to answer new questions. I wrote this book to show students that economic theory has practical, problem-solving uses and is not an empty academic exercise.
This book shows how individuals, policy makers, and firms can use microeconomic tools to analyze and resolve problems. For example, students learn that
* individuals can draw on microeconomic theories when deciding about issues such as whether to invest and whether to sign a contract that pegs prices to the government's measure of inflation;
* policy makers (and voters) can employ microeconomics to predict the impact of taxes, regulations, and other measures before they are enacted;
* Lawyers and judges use microeconomics in antitrust, discrimination, and contract cases;
* firms apply microeconomic principles to produce at minimum cost and maximize profit, select strategies, decide whether to buy from a market or to produce inter-nally, and write contracts to provide optimal incentives for employees.
My experience in teaching microeconomics for the departments of economics at
MIT, the University of Pennsylvania, and the University of California, Berkeley; the Department of Agricultural and Resource Economics at Berkeley; and the Wharton Business School has convinced me that students prefer this emphasis on real-world
Issues.
This edition is substantially revised. Each chapter has new and updated exam-ples, and all but the first chapter have new or revised theoretical material.
Features
This book differs from other microeconomics texts in three main ways:
* The text integrates real-world "widget-free" examples throughout the exposi-tion, in addition to offering extended applications.
* It places greater emphasis than other texts on modern theories—-such as industrial organization theories, game theory, transaction cost theory, information the-ory, and contract theory-that are useful in analyzing actual markets.
* It employs a step-by-step approach to demonstrate how to use microeconomic theory to solve problems and analyze policy issues.