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THE MICRO IN PRINCIPLES OF MACRO: A SURVEY AND
MODEST PROPOSAL
Nancy J. Burnett, Marianne Johnson, and Alexander Kovzik1
Abstract
To better understand the degree to which students enrolled in principles of macroeconomics are
exposed to fundamental microeconomic concepts, we survey twenty popular textbooks. Using
the TUCE guidelines as a framework, we categorize the microeconomic content of the textbooks
by topic and amount of coverage. We find that for the significant percentage of undergraduates
who take only a single semester of macroeconomics, these students are left without enough
exposure to the core concepts of microeconomics – including ones that underpin macroeconomic
models. On its own, we hope our detailed survey will prove useful to instructors who must select
between a myriad of seemingly similar textbooks. In addition, we make a modest proposal for
how instructors could include some specific microeconomic content at low opportunity cost.
Key Words: Principles of Macroeconomics, Micro-foundations, Textbooks of Economics
JEL Codes: A22
Introduction
Undergraduates since the time of Alfred Marshall have studied the Principles of
Economics (1890). For Marshall, all such principles were microeconomic in nature. Subsequent
textbooks from the early 20th century, including Richard T. Ely’s best-selling Outlines of
Economics (1930), followed Marshall’s focus on microeconomic theory but appended a handful
of chapters on ‘macroeconomic’ topics such as monetary policy and business cycles. Paul
Samuelson’s Economics (1948) fundamentally changed both the conception and the teaching of
economics by integrating the two into “a grand neoclassical synthesis.” 2 The inaugural edition of
his textbook placed macroeconomic problems such as unemployment and depressions first; these
were followed by microeconomic topics. In later editions, the order would be reversed.
Contemporary textbooks go both ways – some opt for microeconomics before macroeconomics
(Mankiw 2021) and others, after a few introductory chapters, present macroeconomics before
microeconomics (Miller 2021). A distinct minority of recent books have attempted to upend the
established orderings by reconceiving textbooks along applied or topical lines (CORE 2017;
Bowles and Carlin 2020). While having some ardent adopters, such textbooks are not yet the
mainstream of undergraduate teaching.
1 Nancy J. Burnett, Professor of Economics, Emeritus, University of Wisconsin Oshkosh, Oshkosh, WI, 54901.
Marianne Johnson, Professor of Economics, University of Wisconsin Oshkosh, Oshkosh, WI, 54901. Alexander
Kovzik, Associate Professor of Economics, University of Wisconsin Oshkosh, Oshkosh, WI, 54901.
2
The relation of macro to micro has been “actively discussed from nearly the moment that the distinction between
micro and macroeconomics emerged in the 1930s” (Duarte and Lima 2012, 4). Questions about the scale of analysis
and aggregating individual behaviors continue to persist. The push for micro-foundations for macroeconomics that
emerged in the later 1970s has only complicated the issue, so that now for “many young economists who are
unfamiliar with the history of macro, the thought of doing macro without representative agent micro foundations is
almost heretical” (Colander et al. 2008, 236).
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The absence of consensus regarding the optimal sequencing of economics textbooks
spills over to the sequencing of principles courses. Whereas John Fizel and Jerry Johnson (1986)
recommended micro to precede macro, Jane Lopus and Nan Maxwell (1995) suggested the
opposite. Others such as David Brasfield et al. (1993) claim it makes no difference. Andy Terry
and Ken Galchus (2003) solve the problem by arguing for concurrent enrollment. More recently,
Gerald Prante (2016, 82) reviewed the offerings of the 380 colleges and universities listed in the
Princeton Review’s Best Colleges Edition. He finds that the majority of schools offer separate
microeconomic and macroeconomic principles courses, and most institutions allow students to
choose the order in which to take the classes.
The teaching of economics principles is not a trivial matter. In their survey of
undergraduate education, Sam Allgood, William Walstad, and John Siegfried (2015) outline the
instructional obligations of economics departments – certainly to offer a set of courses for the
major. With much wider reach, however, economics departments also offer principles courses in
service to other departments. These courses form the foundation for study in fields such as
business, political science, sociology, environmental studies, and international studies. Most such
departments require students to take one or two courses in economics early in the major.
Siegfried and Walstad (2014) similarly emphasize the importance of principles courses to the
broader educational experience, estimating that 40 percent of undergraduates take at least one
economics course during their collegiate career. “Obviously, the course taken most often would
be introductory economics, either as a single-semester course, a two-semester sequence of
principles of microeconomics and principles of macroeconomics, or at least half of the two-
course sequence” (Siegfried and Walstad 2014, 148). This has long been true – Samuelson
envisioned his textbook as being useful for those students “who will never take more than one or
two semesters of economics” (1948, v).
Most economists would likely agree that in an ideal world all undergraduates would take
both microeconomics and macroeconomics. Well-informed citizens and voters should
understand both the implications of government policy decisions regarding unemployment as
well as how the profit motive spurs businesses to expand or contract employment and/or to
substitute capital for labor in the production process. However, university pressures to keep
general education requirements minimal and manageable and departmental incentives to
encourage courses within rather than outside one’s major mean that practically, many U.S.
students will only take a single economics course.3 Although precise estimates are sparse,
anecdotal and observational evidence suggests quite a lot of students fall into the “half of the
two-course sequence” category – especially common would be the non-business and non-
economics majors who take economics to fulfill general education requirements or major
requirements.4 It was concern for these students that led Lopus and Maxwell (1995) to conclude
that for those who take only one principles course, it should be macroeconomics, as it tends to
3 One option that some institutions adopt is that of a hybrid or survey course. Offering such a course has
implications for resource allocations in a department, especially if the course might not regularly fill, if other
departments might not choose to require the course, or if faculty are needed to teach semester-long micro or
macroeconomics sections. At our institution, for example, we have a hybrid course, but it does not meet the same
general education requirements as microeconomics or macroeconomics. Further, departments such as social work
and sociology require either macroeconomics or microeconomics and do not allow the survey course. Hence, the
survey course is offered infrequently compared to micro and macroeconomics.
4 Prante (2016, 78) reports that of 369 schools, 92 offer a combined micro-macro principles course and seven
schools offer a choice of a combined micro-macro survey course or separate courses in microeconomics and
macroeconomics.
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incorporate some fundamental microeconomic principles, whereas microeconomics tends not to
cover any macroeconomics at all. Hart Hodges, Yvonne Durham, and Steve Henson (2018)
speculate that many students may voluntarily opt for macroeconomics over microeconomics
because they think microeconomics has steeper mathematics requirements or because they see
macroeconomics as more practical and interesting.
The purpose of this paper is not to change policies regarding which course should be
taken first, or which single class must be taken by those in the “half of the two-course sequence”
category. Rather than recommending substantial instructional or institutional changes, we take as
given that a significant number of students either will take only a single economics principles
course or will take macroeconomics before they take microeconomics for various reasons.5 The
question thus becomes how instructors can best convey the wholeness of economics to these
students – the fundamental principles and ways of thinking that underpin much of both micro
and macroeconomics. Students not exposed to the core microeconomic concepts on which
macroeconomics is built may finish the course without any vision of ‘the big picture,’ leaving
them less able to spot specious economic arguments. We suggest that macroeconomics
instructors can incorporate some essential microeconomics concepts in an introductory
macroeconomics course with little cost and potentially much benefit, measured as deeper student
comprehension.
We motivate our discussion with a survey of popular macroeconomics textbooks,
considering which ‘microfoundations’ each includes and how these topics induce a deeper
understanding of macroeconomic concepts. Using the TUCE guidelines as a framework, we
categorize the microeconomic content of the textbooks by topic and amount of coverage. Judging
by textbook exposure, we infer that a significant proportion of students may have only limited
exposure to the core concepts of microeconomics that are important to macroeconomics –
including ones that underpin macroeconomic models.6 On its own, we hope our detailed survey
will prove useful to instructors who must select between a myriad of seemingly similar
textbooks. We also make a modest proposal for how instructors could include some
microeconomic content with low opportunity cost. In doing so, we attempt to make the case for
instructors to occasionally reflect on their course structure and content, to reconsider their
textbook choices, and to think deeply about the picture of economics they give to students.
Survey of Textbooks
We survey the current editions of twenty common macroeconomics principles textbooks
published on the microeconomic content included.7 To organize the microeconomic concepts
contained in macroeconomics textbooks, we employ the structure and classifications of the Test
5 During the last twenty years, our institution has experimented with the sequencing order before finally giving up
and allowing students full flexibility in scheduling their principles courses. Such flexibility is not without a cost.
When students were required to take microeconomics before macroeconomics, every student was in the same
position and most macroeconomics syllabi would include only a very brief review of the supply and demand
mechanism. Now, instructors must devote extra time to the detailed introduction of core microeconomics principles
at the expense of some macroeconomics topics.
6 Such similarity has been previously noted: “Past studies of achievement in introductory economics found that the
choice of textbook does not appear to matter, probably because of the homogeneity in textbook features and content
coverage among the leading principles of economics textbooks (Allgood, Walstad and Siegfried 2015, 294).
7 It is difficult to generate a definitive list of top-selling textbooks beyond that by Mankiw, which is estimated to
cover 20 to 25% of the market for introductory textbooks. Those included here were in part influenced by
Samuelson (2019) and Bowles and Carlin (2020), as well as by our own experiences and those of our colleagues.
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of Understanding in College Economics (TUCE-4). The TUCE is a joint effort of the Committee
on Economic Education (CEE) of the American Economic Association (AEA) and the National
Council on Economic Education (NCEE); it has long offered a reliable assessment instrument for
students in principles of economics courses (Walstad, Watts, and Rebeck, 2007). The TUCE’s
content categories for microeconomics and the recommended percentage ranges for the
allocation of test items are summarized in Table 1.
We realize the inclusion of microeconomics topics in macroeconomics textbooks does
not guarantee that instructors will necessarily discuss them. However, this applies equally well to
macroeconomics topics. While many instructors may not have time to cover international
economics or exchange rates, these topics are still routinely included in macroeconomics
textbooks because (i) they are important subjects, and (ii) textbooks operate as a resource for
students seeking more information. We argue it is better for an instructor to have the option to
assign particular chapters as suggested reading, supplemental reading, or a bonus assignment
than to have to find or generate their own material to fill in gaps. An insufficiency of
microeconomic content in macroeconomic textbooks can also contribute to perceptions that the
material is not of importance or that the topics are “a collection of random topics” (Kagundu and
Ross 2015, 20) rather than fundamental building blocks.
Table 1. Microeconomic Topics in the TUCE
Category
Examples of Topics Recommended
Percentage
Allocation
A. The Basic Economic
Problem
Scarcity, Opportunity Cost, Choice 10 – 15%
B. Markets and Price
Determination
Determinants of Supply and
Demand, Utility, Elasticity, Price
Ceilings and Floors
20 – 25%
C. Theory of the Firm Revenues, Costs, Marginal Analysis,
Market Structures
25 – 30%
D. Factor Markets Wages, Rents, Interest, Profits,
Income Distribution
10 – 15%
E. The Role of Government
in a Market Economy
Public Goods, Maintaining
Competition, Externalities, Taxation,
Income Redistribution, Public
Choice
15 – 20%
F. International Economics Comparative Advantage, Trade
Barriers, Exchange Rates
10 – 15%
As publishers seek to balance content coverage with production costs, it is inevitable that
textbook authors must make decisions about which topics are most deserving of inclusion.
Certainly, it would be unrealistic to expect macroeconomics textbooks to fully cover the gamut
of microeconomics topics – yet many authors make the choice to include at least some brief
discussion of various microeconomic concepts. Not infrequently, authorial choices regarding
coverage are criticized. For example, Robert Samuelson (2019) suggests it is time to retire the
Mankiw textbook because it fails to cover the impact of the Internet or digitalization — nor does
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it pay much attention to the Great Recession of 2007 – 2009 or the rise of China. Samuel Bowles
and Wendy Carlin (2020) call for a major overhaul of textbooks to better address contemporary
economic problems such as climate change and discrimination.
Not surprisingly, the textbooks we survey include different amounts of microeconomic
content, measured by topics covered, the number of chapters, and the number of pages. Although
all the textbooks have about the same amount of coverage of The Basic Economic Problem of
scarcity and opportunity cost, from there, texts diverge significantly. For instance, Miller (2021),
McConnel, Brue and Flynn (2021), and Sexton (2020) each devote two chapters to the analysis
of market failures, including externalities and public goods. Cowen and Tabarrok (2018) include
a full chapter on public choice later in their book, and Stevenson and Wolfers (2020) have a
chapter on inequality - all of these follow the traditional discussion of the mechanism of supply
and demand and government intervention via taxes and price controls. The other textbooks
include notably less on these topics.
To better capture specific topics, we divide each of the general categories listed in Table
1 into subtopics (also guided by the TUCE). In some cases, we find significant commonalities,
while in others there is much less agreement on what should be included in a macroeconomics
textbook. Our findings are summarized in Table 2. Appendix A provides detailed list of the exact
number of ‘microeconomic’ chapters in the introduction section of various macroeconomics
textbooks and their location in the book.
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Table 2. Microeconomics Topics and Macroeconomic Textbook Coverage
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Key for Table 2
N = Not included
Y= Yes included
D= definition only
C = Competitive markets discussed
I = Imperfect markets included
No = No distinction
DMB = Diminishing Marginal Benefit
RP = Relative Prices
DMU = Diminishing Marginal Utility
DMV = Diminishing Marginal Value
SE = Substitution Effect
IE = Income Effect
I = in International chapter (end of text)
G = in General (early in book) material
MI* = International material early in text rather than later in the book
LW = Losers and Winners mentioned (only)
NL = Net Loss (only, rather than DWL)
DWL = Dead Weight Loss
Markets and Price Determination
Beginning with the TUCE microeconomic classification of Markets and Price
Determination, we note that understanding markets (supply, demand, equilibrium) may be the
most critical microfoundation for macroeconomics. This rather broad classification, however,
contains a wealth of subtopics that are covered quite differently across the texts in our sample. In
eight of the surveyed textbooks, the supply and demand model is the only microeconomic topic
included beyond scarcity, opportunity cost, and choice. All 20 macroeconomic textbooks devote
time and effort to explicating the factors of supply and demand – and it is not surprising that in
all cases, the model is elaborated succinctly in one or two chapters. Furthermore, market
structure is often confined to the case of perfect competition. In seven out of 20 textbooks (Table
2, noted by “C, I” for both competitive and imperfect markets)., there is a single statement to the
effect that the study of perfect competition provides useful insights into real-life markets despite
these being rarely characterized by perfect competition (Karlan and Morduch 2021). In another
four textbooks, the authors emphasize that the price mechanism presumes a competitive market,
but without any discussion of imperfect markets (“C” for only mention of perfect competition
without any reference to other market structures in Table 2). In the remaining nine textbooks, the
authors explain the law of demand, the law of supply, and equilibrium without any reference to
market structures (“No” means no distinction between market structures in Table 2, Supply and
Demand column).
Although the TUCE lists utility as an important subcomponent of Markets and Price
Determination, it is all but excluded from macroeconomic textbooks. This seems unfortunate as
the concept of diminishing marginal utility is one of the pillars of mainstream microeconomics,
grounding explanations of the law of demand. Since demand is what people are willing and able
to buy at all possible prices, a traditional explanation of the law of demand suggests three major
arguments: the diminishing marginal utility, the substitution effect, and the income effect. In
microeconomics, the chapter on consumer behavior usually provides an analysis of the three
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phenomena based on the utility function and the budget constraint. In macro textbooks, only
Case and Fair (2021) and McConnell, Brue and Flynn (2021) make any reference to marginal
utility in their presentation of the law of demand (Table 2, “DMU”). In four books, the authors
use the term diminishing marginal benefit (or value) to address the motivation of the law of
demand (“DMB” in Table 2). In five books, the only reason for the negative slope of the demand
line is the change in the relative price “RP” which appears to be hinting at the substitution effect.
In four books, the authors refer to two out of the three major arguments and only McConnell,
Brue, and Flynn (2021) explain the law of demand on the basis of all three – the substitution
effect, the income effect, and the diminishing marginal utility. In six books, the law of demand is
defined without any explanation as to why people buy more when the price goes down and buy
less when it goes up (this is noted with a “No” in Table 2 in the Law of Demand and Supply
column).
Using the concept of diminishing marginal returns is one common way to generate an
understanding of the law of supply in microeconomics. Students who take only macroeconomics
will have limited exposure to production decision-making. In all 20 of our surveyed textbooks,
the idea of diminishing marginal returns is used to build the macroeconomic production function
in the chapter on economic growth. This is done without any connection to the Law of Supply.
Furthermore, the Law of Supply, itself, is generally developed in macroeconomic textbooks
separate from profit considerations. In twelve textbooks, profits are excluded entirely, though
even a very compact introduction to profit as a motive for production would be useful in
explaining the difference between the change in supply and the change in quantity supplied.
Similarly, though elasticity is another important tool of the price determination only five
textbooks cover elasticities; other authors opt not to introduce the concept at all.
Consumer and producer surplus are defined and discussed in thirteen of the 20 textbooks
in our survey (fourth column under Market and Price Determination in Table 2). Sexton (2020)
and Stevenson and Wolfers (2020) measure consumer surplus for an individual using an
individual’s demand curve before explaining the idea at the market level. The other textbooks
only explain consumer surplus in the context of market demand. Price discrimination, when
different customers pay different prices for the same product, or when a customer pays a
different price for larger quantities than for smaller quantities, is not addressed in
macroeconomic textbooks. Consumer and producer surplus, along with deadweight loss, can be
applied to outcomes of government intervention in markets applicable in macroeconomics
including situations of price ceilings/floors, excise taxes, tariffs, and quotas. Eighteen textbooks
cover some aspect of price floors or price ceilings; in twelve, however, the negative impact of
government restrictions is addressed without reference to deadweight loss. Furthermore,
although tax incidence can probably be best explained using the concept of elasticity, only four
textbooks do so; eleven (including six that list consumer/producer surplus in the index) do not
raise the question of tax incidence. Atypical of the group, Coppock and Mateer (2021) devote
fifteen pages of their macroeconomic textbook to tax incidence, which includes analysis of
deadweight loss and elasticity.
Theories of the Firm
After the problem of scarcity and the three fundamental questions of what, how, and for
whom to produce, there remains the idea of how each society will organize its economic system.
U.S. macroeconomic texts generally confine themselves to the capitalist system as based on the
profit motive and entrepreneurial ability, though rarely do they make this explicit. In eight books
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out of the 20, profit is mentioned in the supply and demand chapter, but that mention is often
brief and without further elaboration. The most common context for the definition of profit (in 16
books) is the circular flow model and/or the description of the four major real resources and the
four corresponding monetary incomes. In nine out of these 16 textbooks, there is a statement
regarding the role of an entrepreneur in putting other factors of production together but often
without analysis of profit as the major driving force of the market economy. The description of
entrepreneurship is often compressed into one or two short paragraphs. For example,
classification of sole proprietorships, partnerships, and corporations in the 16 texts is not
followed by a discussion of profit. The authors of the remaining four books we survey do not list
‘profit’ in the index, though we are able to find casual mentions in the introductory chapters and
the chapters on national income accounting. Only one of the four books talks about the role of
the entrepreneur in a market economy (O’Sullivan, Sheffrin and Perez 2020). See Table 2,
second column under the heading of Theory of the Firm; the first letter indicates the existence of
profit in the index and the second letter indicates mention of entrepreneurship. For example, “Y,
N” would mean there is a mention of profit, but no mention of the role of the entrepreneurship.
Turning to other important subcategories under the TUCE classification of Theory of the
Firm, only Stevenson and Wolfers (2020) make profit and profit maximization a focal point in
the explanation of not only the law of supply but also of the marginal principle, in general. They
illustrate profit maximization in the labor market decision with a computation of total revenues,
total costs, marginal revenues, marginal costs, and profits in a table traditional for
microeconomics. Acemoglu, Laibson, and List (2018), Case and Fair (2020), McConnell, Brue,
and Flynn (2021), and McEachern (2017) emphasize profit maximization (in addition to profit)
as a goal. However, the analysis runs to one or two sentences without much explication of the
mechanism by which to achieve it. In six books listed in the MR=MC column of Table 2, the
general marginal principle is illustrated with the examples of various types of business practices,
but without the direct reference to profit (Case and Fair 2020; Hubbard and O’Brien 2021;
Mankiw 2021; McEachern 2017; O’ Sullivan, Sheffrin, and Perez 2020; and Sexton 2020). One
popular example is when airlines sell a discount ticket that does not cover the average cost of
flying, so long as it covers the marginal cost of the additional passenger (Case and Fair 2020;
Mankiw 2021; and Sexton 2020). However, while the marginal cost is defined in almost every
textbook, either in connection to the law of supply or to the marginal principle in general, this is
not the case when it comes to average costs, which is treated more casually, and often without
the distinction between fixed and variable costs.
As we noted previously, imperfect markets are not treated in chapters on supply and
demand in 18 out of 20 books. Monopoly is mentioned in 12 books as an example of market
failure but without discussion of the mechanism of price determination. The concept of elasticity
and the availability of substitutions clearly demonstrate ideas of market power. Yet, of the five
textbooks that cover elasticity, none connect elasticity to market power. Overall, the
microeconomic category of Theories of the Firm is the least treated in macroeconomic textbooks.
Factor Markets
Bowles and Carlin (2020) suggest that microeconomics can be integrated into
macroeconomics most easily in discussions regarding labor and credit markets. Although Factor
Markets are important in both micro and macroeconomics, most mainstream textbooks diverge
over which of the factors receives the most play. Microeconomics tends to give significant space
to the determination of wages; interest rates receive extensive treatment in macroeconomics. The
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concept of rents typically emerges only in the context of the circular flow model and in national
income accounting for GDP calculation. It would be fair to note that in microeconomics, rent is
also not deeply analyzed. We argue that all students need to understand that markets exist for
labor, land, and capital – their prices determined by markets. Such analysis of factor markets
underpins discussions of income distribution. Yet, textbooks avoid direct explications of the
marginal productivity theory of distribution – the closest is connecting the marginal productivity
of labor to the real wage (Acemoglu, Laibson, and List 2018; Bade and Parkin 2021; and
O’Sullivan, Sheffrin, and Perez 2020). The inefficiency of excise or sale taxes and/or tax
incidence is addressed only in 9 out of the 20 textbooks (Tax Incidence column of Table 2 under
Factor Markets).
The TUCE considers income distribution and redistribution separately. In principles of
microeconomics textbooks, income distribution, inequality, poverty, discrimination, and the role
of the government to correct such market outcomes are often bundled together in the same
chapter. In macroeconomics, however, these concepts are scattered among several chapters.
Since it is impossible to teach national income accounting, business cycles, unemployment,
fiscal policy, and debt and deficit structure and financing without at least a brief description of
the progressive tax system, transfer payments, unemployment compensation, and other
entitlement programs, all such concepts appear readily in the text of the surveyed books.
However, if students were assigned to study income distribution as a concept, they would need to
read through the entire book to put the various pieces of the puzzle together. Only Stevenson and
Wolfers (2020) dedicate a chapter to “Inequality, Social Insurance, and Redistribution.” How the
government can alter income distribution is briefly articulated in eight textbooks; the most
detailed treatment occurs in Stevenson and Wolfers (2020) in the context of the trade-off
between equity and efficiency and a caution regarding the potential degradation of economic
outcomes with income redistribution. Sexton (2020, 55) similarly notes “the degree-of-equality
argument can generate some sharp disagreements.” About half of the textbooks we survey
exclude mention of redistribution as a function of government.
Bowles and Carlin (2020) report that the problems of inequality and poverty animate
much of student interest in economics globally – being two of “the most pressing problems
economists should address.” 8 As an indicator of income inequality, we examined the textbooks
for use of the Lorenz curve and the Gini coefficient in the context of poverty and/or
discrimination - all the textbook authors leave the instruments for measuring inequality to
microeconomics. Poverty as a subject is excluded from Baumol and Blinder (2020), Hubbard
and O’Brien (2021), and Krugman and Wells (2021). In the other 16 textbooks, poverty is
defined in chapters on either economic growth or development economics (e.g., Coppock and
Mateer 2021, 359 - 360). Poverty in the United States is less popular; for example, the definition
of the poverty line for the U.S. is not found in any of our surveyed macroeconomic textbooks,
other than in Stevenson and Wolfers (2020).
Although ‘discrimination’ was rarely specifically identified when students were asked
about “the most pressing problems” in contemporary economics, the prevalence of related words
suggest that discrimination is, in fact, a serious concern for students (related words include
immigration, fairness, refugee crisis, wage gap, equal pay, minimum wage, disparities, and social
8 Over the past several years, CORE instructors have been asked to collect from their students one-word answers to
the question “what is the most pressing problem economists today should be addressing?” Data imaging from more
than 4400 students at 25 universities and in twelve countries are available at https://www.core-econ.org/escaping-
from-imaginary-worlds-update/
https://www.core-econ.org/escaping-from-imaginary-worlds-update/
https://www.core-econ.org/escaping-from-imaginary-worlds-update/
11 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
injustice). Yet, only two macroeconomics textbooks in our survey list discrimination as a
specific topic in the index (Boyes and Melvin 2016; Sexton 2020). For example, Sexton (2020)
explains rent controls can encourage housing discrimination because landlords can indulge in
their ‘taste’ for discrimination without any additional loss beyond that generated by the market
controls alone. Consequently, they can choose to rent to people they deem more desirable.
Fifteen textbooks address discrimination tangentially in tables on the unequal burdens of
unemployment, but without much elaboration. McConnell, Brue, and Flynn (2021) and Taylor
and Weerapana (2020) provide some specific examples of discrimination against women and/or
minorities; the former, for example, comments on racial differences in unemployment rates in
the United States. In three textbooks, differing unemployment rates by race are unconsidered
(Bade and Parkin 2020; Cowen and Tabarrok 2018; Miller 2021).
Role of Government
The Economic Role of Government in a Market Economy includes such various topics as
market failure, public choice, public goods, and externalities (the four columns under the heading
of Role of Government in Table 2). Though treated as conceptually similar problems in
microeconomics, this is not the case in macroeconomics. For example, of the 13 macroeconomic
textbooks that cover both the concept of deadweight loss and market failure, only six connect the
two. Stevenson and Wolfers (2020) is an outlier of the macroeconomic textbooks, including a
detailed introduction to market failure, deadweight loss, and government action.
As noted, imperfect markets receive little discussion in macroeconomic textbook chapters
on supply and demand. Monopoly and the role for government in preserving competition do get
some treatment elsewhere in the textbooks. Twelve textbooks identify monopoly power as a
market failure, and ten out of the 12 declare market regulation as one of the major functions of
the government. The role of the government in promoting competition is generally mentioned
without much insight into particular policy instruments. Contrary to microeconomics, where
monopoly is the traditional example of the inefficiency of underproduction, only one of the
surveyed macroeconomics textbooks deploy deadweight loss as a measure of such inefficiency.
(Stevenson and Wolfers (2020).
It is perhaps surprising that Public Choice gets so little consideration in macroeconomic
textbooks – in the contemporary literature, Public Choice has much to contribute to
understanding deficit spending, the ratchet effect, policy decision-making, and other aspects of
discretionary governmental spending. Yet, Public Choice goes unmentioned in fifteen
macroeconomic textbooks; two others provide minimal cursory treatment (Boyes and Melvin
2016; Chiang 2020). McConnell, Brue, and Flynn (2021) and Cowen and Tabarrok (2018) both
dedicate a chapter to the political economy of the government; in Sexton (2020) public choice
theory is addressed as a section of a similarly oriented chapter. All three books emphasize the
costs and benefits of government policies and the limitations of majority voting.
Among the 11 textbooks that include public goods in the index, seven define public
goods, nonrivalry, and non-excludability in one or two paragraphs in a larger list of market
failures. In another four textbooks, there is a more detailed description of the characteristics of
the pure private and pure public goods and the free-rider problem. Only McConnell, Brue, and
Flynn (2021) offer the traditional microeconomic graph of market demand for public goods,
which is based on the vertical summation of individual demand lines as opposed to the horizontal
summation for the private goods. Descriptions in other books leave some room for
misunderstanding when authors claim only that it is not profitable for the private companies to
12 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
produce public goods. We do not find a clear distinction between the provision of public goods
and the production of public goods; publicly produced private goods are mentioned in one
textbook (Miller 2021). In the other nine textbooks, public goods go unmentioned (the Public
Goods column of Table 2). In three out of these 9 texts, the government is added to the circular
flow diagram, however, the flows between the government and the private sector include taxes
and money transfers without reference to public goods. Those books we surveyed that employ
the formula C + I + G + (X – IM) do not distinguish between government purchases of private
goods, such as office supplies, from the provision of public goods, such as national parks. As a
result, there is no discussion in the context of leakages and injections in national income
accounting of the role of government as an intermediary between taxpayers and the private
companies contracted to implement public projects.
The treatment of externalities in macro textbooks is similar to that of public goods. Out of
20 textbooks, a definition and a very brief description can be found in 11 textbooks typically in
the chapter or section devoted to market failures. Acemoglu, Laibson, and List (2018), Chiang
(2020), and Stevenson and Wofers, (2020), define externalities without direct reference to the
role of the government regulation in internalizing them. A relatively substantial number of pages
are devoted to externalities and government policies in four books, including discussion of
Pigouvian taxes and subsidies and regulation. The problem of unclear property rights as a cause
of externality is covered in three; only McConnell, Brue, and Flynn (2018) and Sexton (2020)
consider transferable pollution permits, and only Sexton (2020) refers to the Coase Theorem.
Five books do not raise the question of externalities at all (Externality column, Table 2).
Although issues of sustainability and climate change have become increasingly important to
students (Bowles and Carlin 2020), they have not yet found their way into most macroeconomic
textbooks (Samuelson 2019).
International Economics
Since Adam Smith’s Wealth of Nations (1776), International Economics has been a focus
of study. Both contemporary microeconomics and macroeconomics textbooks give the topic
notable coverage, though usually with a somewhat different focus. In macroeconomic textbooks,
the most common discussions are issues of exchange rates, barriers to trade, gains from trade,
and the notions of comparative and absolute advantage. Most texts allocate a chapter to
international economics at the end of the book – it is for the most part treated separately from the
‘principles of macroeconomics.’ Further, by virtue of appearing last, international economics is
less likely to receive coverage if time is short – as a sidebar, having this material at the end of the
book implies it is less important than earlier material. Most commonly are the concepts of
absolute and comparative advantage. Out of 20 textbooks, 12 discuss it twice: first in the context
of the opportunity costs and the production possibilities frontier and a second time in the chapter
on international trade. In three textbooks, this concept is introduced as a general principle only
and completely omitted from the international material (Cowen and Tabarrok 2018; Karlan and
Morduch 2021; and Mankiw 2021). Three books positioned all of the material on international
economics at the front, making it a part of their general introduction to economics (see Table 2,
“MI”). In only two textbooks does the concept of absolute and comparative advantage appear for
the first time in the final chapters (Table 2, where “I” indicates the only mention for the concept).
Most textbooks relegate the topic of exchange rates solely to the chapter on international
trade. However, in five textbooks, the exchange rate is introduced either as an example of a real-
world supply-and-demand application or as a facet of national income accounting. While trade
13 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
barriers are discussed in 19 of the 20 texts in our survey, different authors treat the outcome of
tariffs and quotas differently. For example, when examining the losses to limiting trade
opportunities, some texts offer a full analysis using deadweight loss (8 texts, see Table 2, the
“DWL” designator). Four textbooks focus on net loss (“NL” Table 2), and seven remaining
books consider ‘winners and losers’ (“LW”) without drawing a general conclusion about the
inefficiency of trade restrictions.
Macro Bits Versus Micro Splits
The majority of microeconomics and macroeconomics textbooks – including all those in
our sample – can be characterized as text splits, where a split is one part of a two-text set drawn
from an existing single volume principles of economics textbook. Locating the corresponding
microeconomics split for each of our 20 macroeconomics textbooks (by name, publisher, and
author), confirms that, at the principles-level, there does not appear to be a division of labor by
authors. No one specializes in either macro or micro as is common at the intermediate level.
Another relevant point is that even though there exist consistent sets of macro and micro splits,
students who take both classes are not guaranteed to have the matching halves of a whole
textbook, unless perhaps, text decisions are made jointly across the department.
That said, we clearly see the pattern that individual course textbooks are designed as if
micro and macro are two parts of the same book. The introductory chapters which cover basic
principles and the economic way of thinking can generally be found in both the microeconomic
and macroeconomic editions (see Table 3). In 16 out of the 20 cases we sample, the introductory
chapters in both splits are identical. In the other four cases, the micro textbooks include one or
two extra chapters relating fundamental principles to microeconomic material in greater depth.
We have not found a single case where a macro split has more chapters in the introduction than
its matching micro split. There is also a consensus among the authors regarding the role of
microeconomic foundations for macroeconomics: “Don’t think about micro- and
macroeconomics as distant halves of economics. Rather, think about macroeconomics as being
built upon your understanding of microeconomics” (Stevenson and Wolfers 2020, 216).
A Modest Proposal
As each author or group of authors must decide for themselves the optimal amount of
microfoundations for macroeconomics – and so must each instructor. As faculty face greater and
greater demands on their time – publishing, committee work, larger classes, pandemic
adjustments – it is easy to revert to the same textbook one has used in the past. We hope this
detailed survey of macroeconomic textbooks, as filtered through the lens of the microeconomic
topics included, provides a way to compare options which are rooted in a traditional or
mainstream approach. For faculty that like to use textbook supplements such as online
homework or quiz systems or who rely on test banks, choosing a book to match one’s own
interests can make the textbook and its supplements more useful for students. The better
matching of books to interests can bridge some of this difficulty. We also hope that consideration
of the textbook topics provides an impetus to reflection on the course structure and content
chosen by instructors.
Our survey persuades us that there is room to improve the microeconomic content in
macroeconomic textbooks without substantial additional costs and without significant tradeoff of
macroeconomic material. We identify a short list of microfoundations that could be added to a
macroeconomic principles course without significant commitment of time or effort by
14 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
instructors. We match these concepts to the macroeconomics textbooks we identify as having
relatively better coverage of the topic. Last, we suggest where in a typical macroeconomic
syllabus the topic could be incorporated (Table 3). Based on our own teaching experience, the
recommended adjustments to the syllabus may require approximately one class period to
elaborate on market and government failures in more detail as a way to bridge the introductory
part of the course to national income accounting. The other microeconomic concepts can find
homes in the introductory week and throughout the course, as indicated in Table 3.
Table 3. Recommendations for Microfoundations
Topics Recommendations
Best Practice Topic in the
Syllabus
Markets and Price Determination
Supply & Demand Include a short description of
different market structures.
Karlan & Morduch
Supply and
Demand
Law of Demand Explain the law of demand on
the basis of all three major
arguments – the substitution
effect, the income effect, and
the diminishing marginal
utility.
McConnel, Brue &
Flynn
Supply and
Demand
Elasticity Explain elasticity and apply to
analyze tax incidence and
market power.
Coppock & Mateer
Sexton
Supply and
Demand
Consumer/Producer
Surplus
Use the tools of consumer and
producer surplus and
deadweight loss to measure
market inefficiencies.
Sexton
Stevenson &
Wolfers
Supply and
Demand
Price Ceilings and
Floors
Illustrate the negative impact
of government restrictions
using the concept of
deadweight loss.
Sexton Supply and
Demand
Theory of the Firm
Profit Motive in
Supply
Stress from the outset that
supply decisions depend on
profit potential.
Case & Fair The Core
Principles of
Economics.
Profit Listed in the
Index/ Role of the
Entrepreneur
Emphasize that an
entrepreneur’s goal to
maximize profit is a driving
force of the market economy
as opposed to command
economy.
McConnel, Brue &
Flynn
The Core
Principles of
Economics.
MR = MC Rule Make profit and profit
maximization (MR = MC rule)
a focal point in the explanation
Acemoglu,
Laibson, & List
The Core
Principles of
Economics.
15 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
of the marginal principle in
general (MB = MC rule).
Stevenson &
Wolfers
Market
Power/Regulation
Illustrate that the inefficiency
of monopoly with the
deadweight loss that results
from underproduction.
Baumol & Blinder
Chiang
O’Sullivan,
Sheffrin & Perez
Supply and
Demand
Factor Markets
Poverty Extend the discussion of the
equity-efficiency tradeoff by
showing how inequality is
measured and providing some
basic data about the number of
Americans living below the
poverty line.
Stevenson &
Wolfers
The Core
Principles of
Economics;
Economic
Growth
Unequal Burden of
Unemployment
Address discrimination when
discussing unemployment and
provide data on the differences
in unemployment rates by race
and gender.
Boyes & Melvin
Taylor &
Weerapana
Business
Cycles,
Unemployment,
and Inflation
Tax Incidence Use elasticity to illustrate tax
incidence, including a
discussion of the elasticity of
labor supply versus capital
supply.
Coppock & Mateer Supply and
Demand; Fiscal
Policy
Redistribution Recognize that regardless of
political leanings,
redistribution is now one of
the major functions of
government; continue the
discussion of the equity-
efficiency tradeoff.
Stevenson &
Wolfers
Fiscal Policy
Role of Government
Market Failure Address the problems of
market failure and of
government failure when
discussing the efficiency of
markets.
Stevenson/Wolfers The Core
Principles of
Economics;
Market
Failures.
Public Choice Introduce the pros and cons of
the mechanism of democratic
decision-making; discuss why
government failure might
occur in budgeting and policy-
decision making.
Cowen & Tabarrok
McConnell, Brue
& Flynn
The Core
Principles of
Economics;
Market
Failures;
16 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
Public Goods Make a clear distinction
between the provision and the
production of public goods
versus private goods; consider
the case of publicly provided
private goods.
McConnell, Brue
& Flynn, Miller
Market
Failures;
Supply and
Demand;
National
Income
Accounting
Externalities Explain the ‘missing market”
interpretation of externalities
and the role of the government
in internalizing externalities.
Sexton Market
Failures;
Supply and
Demand
International Trade
Comparative
Advantage
This concept is well explained
in most textbooks.
Hubbard &
O’Brien
Krugman & Wells
Stevenson &
Wolfers
The Core
Principles of
Economics;
International
Trade
Exchange Rates Introduce the exchange rate in
the foundations chapter or use
the price of a foreign currency
as an example of the real-
world supply-and-demand
application, emphasizing that
currency is just another good.
McEachern
Colander
Supply and
Demand; The
Aggregate
Expenditures
Model
Barriers to Trade Use deadweight loss in the
assessment of trade barriers to
draw a general conclusion
about the inefficiency of trade
restrictions.
Mankiw Supply and
Demand;
Aggregate
Demand and
Aggregate
Supply
Our recommendations can be adopted and adapted by instructors; we also hope they will
spur authors, publishers, and book reviewers to think seriously about the microfoundations that
underlie many of the tools and concepts of modern macroeconomics. Students need to
understand these fundamental microfoundations to be able to see the bigger or overarching
picture that economics paints of societal functioning.9
To create a more holistic vision of the economic approach, we suggest the following as a
set of best practices. We stress that our recommendations target precision in presentation of
9 We disagree with Kagundu and Ross’s (2015, 20) description of their unconventional “Global Economy”
introductory course is illustrative. The first part of the course is “a collection of random topics…These concepts
include definitions of economics, marginal analysis, opportunity cost, supply and demand, gross domestic product
(GDP), inflation, and the production possibilities frontier (PPF). Each of these topics is independent of the others
and can be presented in any order.”
17 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
microeconomic topics, repeated application of core concepts, and brief ‘big picture’ discussions
rather than the inclusion of significant additional material, which we realize would impose
opportunity costs on both authors and instructors by diverting time and effort from critical
macroeconomic content. We understand that the inclusion of these topics does not guarantee
coverage in the classroom by instructors. However, including these microfoundations opens an
opportunity for instructors to discuss the topics and provides students with a more complete
resource.
a). Since the entrepreneur has the leading role putting other factors of production
together, profit maximization should be seen as a core concept in the introduction to economics
and the driving force of the market economy. Profit maximization as a goal of an entrepreneur
(and the MR = MC rule) can be generally introduced in the section on the foundations of
economics.
b). The demand-and-supply chapter should include a definition of perfectly competitive
markets as well as imperfect markets. The major characteristics of each type of market structure
should be discussed, including the number of producers, the severity of the barriers to entry, and
the availability of the substitutes. Students need to understand that the supply-and-demand model
presumes competition with all the participants being price-takers. Other market structures may
see prices determined by different mechanisms.
c). The explanation of the law of demand should be rooted in (i) the concept of
diminishing marginal utility, (ii) the substitution effect, and (iii) the income effect. What
consumers are willing and able to buy at each possible price depends on their utility function and
the budget constraint. Not using all three arguments in introducing the law of demand, would be
equivalent to considering utility function without the budget constraint or other way around. The
law of supply should be motivated by profit maximization. Since profit is the difference between
revenues and costs, supply is likely to react to changes in revenues, which depend on the price of
the product, and changes in production costs, which depend on many factors. The supply
decision is just one of several decisions that firms make to maximize profit (Case and Fair 2020).
Understanding profit maximization is very helpful in explaining the difference between the
change in supply and the change in quantity supplied.
d). Elasticity is a fundamental concept in economics that underpins changes in the
quantity demanded, the ability of suppliers to respond to market shocks, market power, tax
incidence, and the impact of governmental interventions in the economy. For students taking
only a single economics principles course, we argue some exposure to elasticity is fundamental
to the economic way of thinking. The discussion need not be as detailed as it would be in
microeconomics and could be a part of the general supply and demand discussion with an
emphasis on the relative strength of the market players.
e). The concepts of consumer and producer surplus and deadweight loss are also essential
microeconomic tools, which have important implications for macroeconomics. Considerations of
the efficiency of the market and of government policies should not be elective in macroeconomic
textbooks if one goal of the course is to educate voters on policies such as price ceilings and
floors, raising taxes, anti-trust, and trade restrictions.
f). We find treatment of market failure and of evaluating government policies is
scattershot at best in principles of macroeconomics textbooks. Stevenson and Wolfers (2020)
provide an exception, with a thoughtful introduction of market failure, deadweight loss, and
government failure. Given the importance of fiscal policy for standards of living – beyond the
smoothing of business cycles – we suggest textbooks give more room to market failures,
18 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
including the implications of and policy recommendations for situations of public goods,
externalities, and market power.
g). Much like Samuelson (2019) and Bowles and Carlin (2020), we find the problems of
income inequality, poverty, and discrimination are under considered – sometimes woefully so –
in introductory macroeconomics textbooks despite being leading topics of student interest. We
suggest the simplest way to address income distribution is to extend the segment in the
fundamentals chapter which distinguishes between efficiency and equity. We also suggest to
textbooks and instructors include measures of inequality and provide some basic data about the
number of Americans living below the poverty line. Problems of discrimination and
redistribution could be integrated throughout the textbook – in chapters on unemployment,
economic growth, and fiscal policy. The distribution of goods and services (and/or their
redistributions) should be treated as a fundamental macroeconomic function of government
along with the allocation of resources and the stabilization of the economy.
h). Despite an increasingly globalized economy, many students lack even a rudimentary
understanding of the functioning of exchange rates. The idea that exchange rates are ancillary is
reinforced by covering them solely in a late textbook chapter on international trade. Instead, we
argue to include discussion of exchange rates throughout the course and textbook, including in
sections on national income accounting, economic growth, and aggregate demand. A general
introduction of exchange rates is possible as an example of the real-world application of supply
and demand.
i). Last, returning to market inefficiencies – now in the context of international trade – we
argue to treat trade barriers like the related governmental policy interventions of price floors and
ceilings by using deadweight loss. More general examinations of the costs of barriers to trade,
along the lines of ‘winners’ and ‘losers,’ complicate drawing conclusions consistent with the
broader framework of economics.
Conclusions
The most common goal of introductory economics is to encourage students to develop an
economic way of thinking so that they can understand the mechanisms of market economies.
While business and economics majors will be exposed to both microeconomics and
macroeconomics at the principles level, a substantial number of students will take only one
principles-level economics course. For these students, specific economic lessons will likely fade.
Ideally, however, they will retain some grasp of economic principles and understand the major
functions of the market and government for the rest of their lives. This was the point of Paul
Samuelson’s famous claim – “I don’t care who writes a nation’s laws if I can write its economics
textbooks” (Samuelson 1990, xi – x). Or, as Mankiw noted, “the typical student is not a future
economist but is a future voter” (2016, 170). For those selecting only one course, the opportunity
cost is high: you graduate either without knowing the golden rule of profit maximization or
without a clue about what are fiscal and monetary policy.
In this paper, we argue that there is room for the judicious inclusion of fundamental
microeconomics topics in an introductory macroeconomics course. We motivate our suggestion
with a detailed examination of popular macroeconomics textbooks. These books differ notably in
the amount and type of micro-foundational content. The absolute minimum number of
microeconomic chapters in macroeconomics principles texts is two: scarcity and opportunity cost
and supply and demand. Our goal is not to rank the textbooks, but to facilitate better matching of
books with instructor interest. Having a text that covers the material that an instructor most wants
19 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
to highlight makes learning much easier – and is perhaps even more important as online, hyflex,
and hybrid options become mainstays of undergraduate education. Certainly, we recognize that
considerations such as length, writing level, and cost play a role in textbook decisions. However,
we hope that the comparisons provided here prove useful to instructors choosing among the
myriad of macroeconomic textbook options to find the one that most closely aligns with their
course goals and objectives.
We do not mean to imply, however, that the choice of textbook can solve the entire
problem of providing macroeconomics students with sufficient grounding to understand the big
picture of economics. What we hope is that our detailed consideration of the textbook coverage
of microfoundations will encourage instructors to reflect upon their own course structure and
content coverage and what they feel is most important to convey to students. To this end, we
make a modest proposal for how and where macroeconomics instructors could include some
microeconomic content with low opportunity cost and explain how these concepts can deepen
students understanding of macroeconomic concepts.
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Appendix A. Micro Content in the Opening Sections of Macroeconomics Textbooks
Authors Macroeconomics Microeconomics
Acemoglu/
Laibson/List
1 The Principles and Practice of
Economics
2 Economic Methods and
Economic Questions
3 Optimization: Doing the Best
You Can
4 Demand, Supply, and
Equilibrium
1 The Principles and Practice of
Economics
2 Economic Methods and
Economic Questions
3 Optimization: Doing the Best
You Can
4 Demand, Supply, and
Equilibrium
Bade/Parkin
1 Getting Started
2 The U.S. and Global
Economies
3 The Economic Problem
4 Demand and Supply
1 Getting Started
2 The U.S. and Global
Economies
3 The Economic Problem
4 Demand and Supply
Baumol/
Blinder
1 What is Economics?
2 The Economy: Myth and
Reality
3 The Fundamental Economic
Problem: Scarcity and Choice
4 Supply and Demand: An
Initial Look
1 What is Economics?
2 The Economy: Myth and
Reality
3 The Fundamental Economic
Problem: Scarcity and Choice
4 Supply and Demand: An
Initial Look
Boyes/
Melvin
1 The Wealth of Nations:
Ownership and Economic
Freedom
2 Scarcity and Opportunity
Costs
3 The Market and Price System
4 The Aggregate Economy
1 The Wealth of Nations:
Ownership and Economic
Freedom
2 Scarcity and Opportunity
Costs
3 The Market and Price System
4 The Aggregate Economy
Case/Fair
1 The Scope and Method of
Economics.
2 The Economic Problem:
Scarcity and Choice.
3 Demand, Supply, and Market
Equilibrium.
4 Demand and Supply
Applications.
1 The Scope and Method of
Economics.
2 The Economic Problem:
Scarcity and Choice.
3 Demand, Supply, and Market
Equilibrium.
4 Demand and Supply
Applications.
5 Elasticity
Chiang
1 Exploring Economics.
2 Production, Economic Growth,
and Trade.
3 Supply and Demand.
4 Markets and Government.
1 Exploring Economics.
2 Production, Economic Growth,
and Trade.
3 Supply and Demand.
4 Markets and Government.
23 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
Colander
1 Economics and Economic
Reasoning
2 The Production Possibilities
Model, Trade, and
Globalization
3 Economic Institutions
4 Supply and Demand
5 Using Supply and Demand
1 Economics and Economic
Reasoning
2 The Production Possibilities
Model, Trade, and
Globalization
3 Economic Institutions
4 Supply and Demand
5 Using Supply and Demand
Coppock/
Mateer
1 Five Foundations of
Economics
2 Model Building and Gains
from Trade
3 The Market at Work: Supply
and Demand.
Appendix 3A: Changes in Both
Demand and Supply
4 Market Outcomes and Tax
Incidence
Appendix 4A: Price Elasticity of
Demand and Supply
5 Price Controls
1 Five Foundations of
Economics
2 Model Building and Gains
from Trade
3 The Market at Work: Supply
and Demand.
Appendix 3A: Changes in Both
Demand and Supply
4 Elasticity
5 Market Outcomes and Tax
Incidence
6 Price Controls
Cowen/
Tabarrok
1 The Big Ideas
2 The Power of Trade and
Comparative Advantage
3 Supply and Demand
4 Equilibrium: How Supply and
Demand Determine Prices
5 Price Ceilings and Floors
1 The Big Ideas
2 The Power of Trade and
Comparative Advantage
3 Supply and Demand
4 Equilibrium: How Supply and
Demand Determine Prices
5 Elasticity and Its Applications
6 Taxes and Subsidies
7 The Price System: Signals,
Speculation, and Prediction
8 Price Ceilings and Floors
1 Economics: Foundations and
Models
2 Trade-offs, Comparative
Advantage, and the Market
System
3 Where Prices Come From: The
Interaction of Demand and
Supply
4 Economic Efficiency,
Government Price Setting, and
Taxes
5 The Economics of Health Care
6 Firms, the Stock Market, and
Corporate Governance
1 Economics: Foundations and
Models
2 Trade-offs, Comparative
Advantage, and the Market
System
3 Where Prices Come From: The
Interaction of Demand and
Supply
4 Economic Efficiency,
Government Price Setting, and
Taxes
5 Externalities, Environmental
Policy, and Public Goods
24 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
Hubbard/
O’Brien
7 Comparative Advantage and
the Gains from International
Trade
6 Elasticity: The Responsiveness
of Demand and Supply
7 The Economics of Health Care
8 Firms, the Stock Market, and
Corporate Governance
9 Comparative Advantage and
the Gains from International
Trade
Karlan/
Morduch
1 Economics and Life
2 Specialization and Exchange
3 Markets
4 Elasticity
5 Efficiency
6 Government Intervention
1 Economics and Life
2 Specialization and Exchange
3 Markets
4 Elasticity
5 Efficiency
6 Government Intervention
Krugman/
Wells
1 First Principles
2 Economic Models: Trade-offs
and Trade
Appendix: Graphs in
Economics
3 Supply and Demand
4 Price Controls and Quotas:
Meddling with Markets
5 International Trade
Appendix Consumer and
Producer Surplus
1 First Principles
2 Economic Models: Trade-offs
and Trade
Appendix: Graphs in
Economics
3 Supply and Demand
4 Consumer and Producer
Surplus
5 Price Controls and Quotas:
Meddling with Markets
6 Elasticity
8 International Trade
Mankiw
1 Ten Principles of Economics
2 Thinking Like an Economist
3 Interdependence and the Gains
from Trade
4 The Market Forces of Supply
and Demand
5 Elasticity and Its Application
6 Supply, Demand, and
Government Policies
7 Consumers, Producers, and the
Efficiency of Markets
8 Application: The Costs of
Taxation
9. Application: International
Trade.
1 Ten Principles of Economics
2 Thinking Like an Economist
3 Interdependence and the Gains
from Trade
4 The Market Forces of Supply
and Demand
5 Elasticity and Its Application
6 Supply, Demand, and
Government Policies
7 Consumers, Producers, and the
Efficiency of Markets
8 Application: The Costs of
Taxation
9. Application: International
Trade.
1. Limits, Alternatives, and
Choices
2. The Market System and the
Circular Flow
3. Demand, Supply, and Market
1. Limits, Alternatives, and
Choices
2. The Market System and the
Circular Flow
3. Demand, Supply, and Market
25 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
McConnell/
Brue/Flynn
Equilibrium
4. Market Failures Caused by
Externalities & Asymmetric
Information
5. Public Goods, Public Choice,
and Government Failure
Equilibrium
4. Market Failures Caused by
Externalities & Asymmetric
Information
5. Public Goods, Public Choice,
and Government Failure
McEachern
1 The Art and Science of
Economic Analysis.
2 Economic Tools and
Economic Systems
3 Economic Decision Makers.
4 Demand and Supply Analysis.
1 The Art and Science of
Economic Analysis.
2 Economic Tools and
Economic Systems
3 Economic Decision Makers.
4 Demand and Supply Analysis.
Miller
1 The Nature of Economics
2 Scarcity and the World of
Trade-Offs
3 Demand and Supply
4 Extensions of Demand and
Supply Analysis
5 Public Spending and Public
Choice
6 Funding the Public Sector
1 The Nature of Economics
2 Scarcity and the World of
Trade-Offs
3 Demand and Supply
4 Extensions of Demand and
Supply Analysis
5 Public Spending and Public
Choice
6 Funding the Public Sector
O’Sullivan/
Sheffrin/
Perez
1 Introduction: What is
Economics?
2 Key Principles of Economics
3 Exchange and Markets
4 Demand, Supply, and Market
Equilibrium
1 Introduction: What is
Economics?
2 Key Principles of Economics
3 Exchange and Markets
4 Demand, Supply, and Market
Equilibrium
Sexton
1 The Role and Method of
Economics
2 Economics: Eight Powerful
Ideas
3 Scarcity, Trade-Offs, and
Production Possibilities
4 Demand, Supply, and Market
Equilibrium
5 Markets in Motion and Price
Controls
6 Elasticities
7 Market Efficiency and Welfare
8 Market Failure
9 Public Finance and Public
Choice
1 The Role and Method of
Economics
2 Economics: Eight Powerful
Ideas
3 Scarcity, Trade-Offs, and
Production Possibilities
4 Demand, Supply, and Market
Equilibrium
5 Markets in Motion and Price
Controls
6 Elasticities
7 Market Efficiency and Welfare
8 Market Failure
9 Public Finance and Public
Choice
Stevenson/
Wolfers
1 The Core Principles of
Economics
2 Demand: Thinking Like a
Buyer
1 The Core Principles of
Economics
2 Demand: Thinking Like a
Buyer
26 |JOURNAL FOR ECONOMIC EDUCATORS, 22(1), 2022
3 Supply: Thinking Like a Seller
4 Where Supply Meets Demand
5 Welfare and Efficiency
6 Gains from Trade
7 International Trade
8 Inequality, Social Insurance
and Redistribution
3 Supply: Thinking Like a Seller
4 Where Supply Meets Demand
PART II Analyzing Markets
5 Elasticity: Measuring
Responsiveness
6 When Governments Intervene
in Markets
7 Welfare and Efficiency
8 Gains from Trade
9 International Trade
13 Inequality, Social Insurance
and Redistribution
Taylor/
Weerapana
1 The Central Idea
2 Observing and Explaining the
Economy
3 The Supply and Demand
Model
4 Subtleties of the Supply and
Demand Model
1 The Central Idea
2 Observing and Explaining the
Economy
3 The Supply and Demand
Model
4 Subtleties of the Supply and
Demand Model