Introduction to Economic Analysis

ISBN 160049000X


by

R. Preston McAfee
Yahoo! Research

Download the book in PDF format

(Note: permanent link to current version is
http://www.introecon.com/IEA.pdf)

Source Code (Word document)
PDF with Bookmarked chapters (thanks, Troy Clark!)

"The Open Source Introduction to Microeconomics"

Buy a printed copy for $11.10 plus shipping


Links
A substantial revision of this title, co-authored with Prof. Tracy Lewis of the Fuqua School of Business will be published by Flat World Knowledge and is coming soon. Flat World Knowledge has a unique model of free and open textbooks that a faculty member can modify per the terms of their Creative Commons license. Students then have access to that free and open book, but can also purchase very affordable alternate formats like bound print, printable files, audio files, and in the future handheld reader versions. In addition, Flat World offers core student study aids that they promote directly to students, as well as providing ancillary support for professors. The version here will remain at this site for as long as I have interest.

The Notes page.

A blurb about why this book is a good thing and open source considerations influencing the design.

Other Versions
Todd Easton's Antitrust Chapter revision.

Class Websites
McAfee's Class Website and powerpoints.
Satyajit Bose's Course at Columbia.
Hsueh-Ling Huynh's Ec 1011a at Harvard.
Hao Li's course at U Toronto.
Simon Wilkie's Class Website.
Roy Radner's course syllabus at NYU.
Angelo Zago plans to use the text at Verona University.
Tom Andrews' course syllabus at West Chester U.
Nicolas Schmitt's course syllabus at Simon Fraser.
Michelle Goeree's course syllabus at Claremont McKenna.
Eduardo Zambrano's course at Cal Poly.

Older Versions:
Version 2.00: Fall 2006 Version

Please email comments, contribute text, or contribute exercises to introecon at mcafee dot cc.

Using the book? Please send me the link to your class site.



Endorsements

"Let me say that your creative commons Ec 11 text is awesome. Its so much better than anything else out there I've seen... better than MIT's open courseware, and basically every other 'intro to ec' book I've skimmed. It's the Ec book I wish I had... only in my later readings of more advanced books (like Kreps' Microeconomics and The Mathematical Structure of Economics) did I find the cool topics from your book (like auction theory, etc.). However, those either had tons of fluff (especially mathematical fluff) or were all theory without the interesting demographics."

      --Ryan McCorvie, fixed income strategist at a top investment bank


Abstract

This book presents introductory economics ("principles") material using standard mathematical tools, including calculus. It is designed for a relatively sophisticated undergraduate who has not taken a basic university course in economics. It also contains the standard intermediate microeconomics material and some material that ought to be standard but is not. The book can easily serve as an intermediate microeconomics text. The focus of this book is on the conceptual tools and not on fluff. Most microeconomics texts are mostly fluff and the fluff market is exceedingly over-served by $100+ texts. In contrast, this book reflects the approach actually adopted by the majority of economists for understanding economic activity. There are lots of models and equations and no pictures of economists.



Fun and Useful Topics Not Covered In Most Alternative Texts

  • Using elasticities to quantify effects of supply and demand changes, taxes, etc.
  • US demographics and socio-economic data
  • Investment under uncertainty
  • Exploitation of a resource in fixed supply (price rises at the interest rate)
  • Maximization of a renewable resource (cut down trees when they grow at the interest rate...not quite)
  • Price path of collectibles
  • Central city land price gradients (based on transportation costs)
  • Dynamic choice
  • Arrow-Pratt risk aversion
  • Search theory
  • Price floors and ceilings with imperfect rationing
  • When does a competitive market fish to extinction?
  • Peak-load pricing
  • Akerlof's market for lemons
  • Myerson-Satterthwaite theorem
  • Signaling
  • Industry performance and entry in the Cournot model
  • Price dispersion
  • Spatial competition models, and overproliferation of products
  • Agency theory
  • Multi-tasking
  • Auctions
  • Antitrust


National Social Science Press bribing faculty to use their text!
Horizon Textbook Publishing doing the same. Students should be very irate.


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