Essentials of Economics, 7th ed

Book Preface

Whether you are planning to study economics beyond this level, or whether this will be your only exposure to this fascinating subject, we hope that you will find the book enjoyable and that it will give you some insight into the economy in which you live and the economic forces that shape all our lives. Although you have probably never studied the subject before, you will almost certainly know quite a lot of economics already. After all, you make economic decisions virtually every day of your life. Every time you go shopping, you are acting as an ‘economist’: deciding what to buy with your limited amount of money. And it is not just with decisions about buying that we act as economists. How much to work (something that students are increasingly forced to do nowadays), how much to study, even how much time to devote to various activities during the course of the day, are all, in a way, economic choices.

To satisfy us as consumers, goods and services have to be produced. We will therefore study the behaviour of firms and what governs the decisions that they make. How will the decisions of big businesses differ from those of small firms? How will the degree of competition affect the extent to which we gain or lose from the activities of firms?

In analysing economic choices we look at some of the big economic issues that face us all as members of society in the twenty-first century. Despite huge advances in technology, and despite the comfortable lives led by many people in the industrialised world, we continue to suffer from volatile economic growth, industrial change and unemployment and all the insecurity that these bring. We continue to witness poverty and inequality, and in many countries the gap between rich and poor has actually grown wider; our environment is polluted; our growing affluence as consumers is increasingly bought at the expense of longer hours at work and growing levels of stress.

We live in a highly interdependent world where actions have implications elsewhere. The banking crisis of the late 2000s and the subsequent effect on economies and the financial well-being of people, businesses and governments illustrates starkly how individual choices can have not only national but global effects.

So what can be done about these problems? This book seeks not only to analyse these problems but also to examine the sorts of policies that governments might pursue in their attempt to address them. The book is designed with one overriding aim: to make this exciting and highly relevant subject as clear to understand as possible. To this end, the book has a number of important features:

â– â–  A direct and straightforward written style; short paragraphs to aid rapid comprehension. The aim all the time is to provide maximum clarity.
â– â–  A careful use of colour to guide you through the text and make the structure easy to follow.
■■ Key ideas highlighted and explained where they first appear. These ideas are key elements in the economist’s ‘toolkit’. Whenever they recur later in the book, an icon appears in the margin and you are referred back to the page where they are defined and explained. All the key ideas are gathered together at the beginning of the Glossary.
■■ Some of the key ideas are particularly important in affecting the way we see the world: they help us think like economists. We call these ‘threshold concepts’ and there are 15 of these.
■■ Clear chapter-opening pages, which set the scene for the chapter. They also highlight the issues that will be covered in the chapter and can thus be seen as ‘learning objectives’.
â– â–  Summaries at the end of each section (rather than each chapter). These provide a very useful means of revising and checking your understanding as you progress.
â– â–  Definitions of all technical terms given at the foot of the page where the term is first used. The term itself is highlighted in the text.
■■ ‘Pause for thought’ questions integrated in the text. These are designed to help you reflect on what you have just read and to check on your understanding. Answers to all ‘pause for thought’ questions are given in MyEconLab.
â– â–  A comprehensive index, including reference to all defined terms. This enables you to look up a definition as required and to see it used in context.
â– â–  An alphabetical glossary at the end of the book. This gathers together all the defined terms.

â– â–  Plentiful use of up-to-date examples to illustrate the arguments. This helps to bring the subject alive and puts it in context.
â– â–  Review questions at the end of each chapter for either individual or class use.
â– â–  Answers to all odd-numbered questions are given in MyEconLab. These questions will be helpful for self-testing, while the even-numbered ones can be used for class testing.
â– â–  Many boxes (typically four to six per chapter) providing case studies, news items, applications, or elaborations of the text. The boxes are of two types: Case Studies and Applications; and Exploring Economics.
■■ A comprehensive set of web references at the end of each of the four parts of the book. Each reference is numbered to match those in the Web Appendix at the end of the book. You can easily access any of these sites from this book’s own website (at http://www.pearsoned.co.uk/sloman). When you enter the site, click on Hot Links. You will find all the sites from the Web Appendix listed. Click on the one you want and the ‘hot link’ will take you straight to it.
â– â–  Appendices for most chapters appear in MyEconLab. These Web Appendices take the argument further than in the text and look at some more advanced theories. Whilst none of these is necessary for studying this book, and many courses will not refer to them, they provide the necessary additional material for more advanced courses that still require a short textbook.

Good luck with your studies, and have fun. Perhaps this will be just the beginning for you of a lifelong interest in economic issues and the economy.