Modern economics: an Introduction

The volume is divided into three parts: part one is an in troduction microeconomics, containing several innovations which it is hoped will appeal to instructors and students alike. The advan tages of a market economy are laid out initially, followed by a step by-step discussion of how monopoly power, social costs and ben efits, and the like, can erode these advantages, concluding with an analysis of how these problems might be overcome. The most impor tant theoretical simplification in this section is the treatment of busi ness costs, revenue, and profit. For years, instructors have struggled to enliven this material, among the most difficult found in the stand ard texts. Then to the surprise of those who attempt to use their economics in the world of business and finance, it is found that the economist's marginal approach is not frequently employed by businessmen, who rely instead on calculations of total cost, total revenue, and total profit. Modern Economics reconciles these differ ences, and also conserves much space and effort in the process. by encompassing the marginal approach within the break-even framework and diagrams of the world of business. Students who do not take advanced courses in economics will thus realize a clear gain, while those who continue their studies will find the traditional marginal analysis explained in an appendix. One further innovation of part one is the emphasis given to social costs and benefits, as

befits its rapidly growing importance in the modern world. Part two's introduction to macroeconomics is noteworthy for its concluding chapters on new problems of the Keynesian econom ics and new methods to deal with these problems. The attempt is made first to analyze standard neo-Keynesian monetary and fiscal policies, then to assess the weaknesses of these policies, and finally to conclude with a comprehensive discussion of the uno unorthodox

methods of macroeconomic management suggested in recent months. 5. Part three, the international economic experience, is excep tional in receiving more attention than this topic does in almost any other text. The author, by training a development economist, shares the growing conviction that international problems demand more at tention than they have received in American introductory courses.