Principles of Microeconomics

For one semester courses in Introductory Microeconomics and for two semester courses in Principles of Economics. Principles of Microeconomics provides students with the rigor and high-level coverage of both theory and applications. The goal of this text is to show students how many important problems in the modern world can be easily explained with the aid of a few basic ideas. Particularly, the author uses substitution and diminishing marginal values (substitution theory) in consumer theory and comparative advantage and diminishing marginal product in production theory as the foundation of this text. Using this approach, the author shows why the law of demand implies that consumers will smooth consumption over time, why consumers' surplus exists and how it accounts for public financing of professional sports stadiums. In addition, students will see why comparative advantage implies low-wage countries will trade with high-wage countries. Principles of Microeconomics emphasizes the role of property rights in resource allocations.
An entire chapter is also devoted to property rights and transactional costs, covering the Knight road congestion problem with a clear numerical example, as well as the Coase theorem and the problem of public goods.