Principles Of Microeconomics, 8th Edition Solution Manual

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Principles ofMicroeconomics •• Chapter One1CHAPTER ONEThe Economic ProblemOverview CommentsIn Chapter One, we decided to begin by giving students an idea of how diverse and howengaged our discipline is by looking at a number of current controversies. This, we hopehelps tocorrect the perception that many students have of economics as being a dry andtheoretical subject with little relevance to the real world. We next focus on what is,arguably, the most important idea in economics: that scarcity forces choice and choiceinvolves the concept of opportunity cost. We then look at the three fundamental questionsin economics and four methods of co-ordinating an economy and we have found thatstudents react well to a discussion of both of these topics. Perhaps we should remindourselves that introductory chapters are probably the only opportunity for us to encouragestudents to look beyond the market structure and realize that it is only one of variouspossible ways for society to organize its economic affairs.Next, we discuss the fact that the discipline’s methodology is, by necessity, abstract,since this is the only way one can deal with such a broad range of topics. The discussionof the use of abstract methodology leads naturally into a discussion of the role of modelsin economics.We then look at our first model in economics, production possibilities, and show howilluminating this idea can be since it allows us to illustrate some of the basic, but vitaltopics in economics: choice, cost, economic growth, technological improvement and theimmense importance of investment.Suggested Approaches and Helpful HintsAs a starting point in a new course, it may be useful for you to walk students through theStudy Guide (as well as theTest your Understandingquestions in the body of eachchapter) and explain that answers can be found in the Connect Answer Key.It is our experience that if we spend enough time on production possibilities we canillustrate six distinct aspects of economics: the necessity of choice, economic growth,unemployment,efficiency,technologicalchangeandopportunitycost.Thismakesproduction possibilities a powerful model and, more importantly, demonstrates what we

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