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For courses in the principles of economics.

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Introduces students to the basic concepts of economics with engaging stories and timely applications

Students enter their first economics course hoping to gain a better understanding of the world around them, but often leave with their questions unanswered. Economics: Principles, Applications, and Tools is built upon the authors’ philosophy of using basic concepts of economics to explain a wide variety of relevant, current, and engaging economic applications. The 10th Edition incorporates the latest economic developments and timely applications throughout, such as the impact of Bitcoin on monetary policy and the opportunity cost of hosting an AirBnB. By making every chapter accessible and applied, students develop an understanding of core principles that they will use as citizens and consumers, now and in their careers.

Personalize learning with MyLab Economics

By combining trusted author content with digital tools and a flexible platform, MyLab personalizes the learning experience and improves results for each student.

Arthur O’Sullivan is a professor of economics at Lewis and Clark College in Portland, Oregon. After receiving his BS in economics at the University of Oregon, he spent two years in the Peace Corps, working with city planners in the Philippines. He received his PhD in economics from Princeton University in 1981 and has taught at the University of California, Davis, and Oregon State University, winning teaching awards at both schools. He is the author of the best-selling textbook Urban Economics, currently in its 10th Edition, with translations into Russian, Chinese, Korean, Portuguese, Serbian, and Greek.

Professor O’Sullivan’s research explores economic issues concerning urban land use, environmental protection, and public policy. His articles have appeared in many economics journals, including the Journal of Urban Economics, Journal of Environmental Economics and Management, National Tax Journal, Journal of Public Economics, and Journal of Law and Economics.

Professor O’Sullivan lives with his family in Portland, Oregon. For recreation, he enjoys hiking, kiteboarding, and squash.

Steven M. Sheffrin is professor of economics and executive director of the Murphy Institute at Tulane University. Prior to joining Tulane in 2010, he was a faculty member at the University of California, Davis, and served as department chairman of economics and dean of social sciences. He has been a visiting professor at Princeton University, Oxford University, London School of Economics, and Nanyang Technological University, and he has served as a financial economist with the Office of Tax Analysis of the United States Department of the Treasury. He received his BA from Wesleyan University and his PhD in economics from the Massachusetts Institute of Technology.

Professor Sheffrin is the author of 10 other books and monographs and over 100 articles in the fields of macroeconomics, public finance, and international economics. His most recent books include Rational Expectations (2nd Edition) and Property Taxes and Tax Revolts: The Legacy of Proposition 13 (with Arthur O’Sullivan and Terri Sexton).

Professor Sheffrin has taught macroeconomics and public finance at all levels, from general introduction to principles classes (enrollments of 400) to graduate classes for doctoral students. He is the recipient of the Thomas Mayer Distinguished Teaching Award in economics.

He lives with his wife Anjali (also an economist) in New Orleans, Louisiana, and has two daughters who have studied economics. In addition to a passion for current affairs and travel, he plays a tough game of tennis.

Stephen J. Perez is Vice Provost, a professor of economics, and NCAA faculty athletics representative at California State University, Sacramento. After receiving his BA in economics at the University of California, San Diego, he was awarded his PhD in economics from the University of California, Davis, in 1994. He taught economics at Virginia Commonwealth University and Washington State University before coming to California State University, Sacramento, in 2001. He teaches macroeconomics at all levels as well as econometrics, sports economics, labor economics, and mathematics for economists.

Professor Perez’s research explores most macroeconomic topics. In particular, he is interested in evaluating the ability of econometric techniques to discover the truth, issues of causality in macroeconomics, and sports economics. His articles have appeared in many economics journals, including the Journal of Monetary Economics; Econometrics Journal; Economics Letters; Journal of Economic Methodology; Public Finance and Management; Journal of Economics and Business; Oxford Bulletin of Economics and Statistics; Journal of Money, Credit, and Banking; Applied Economics; and Journal of Macroeconomics.

PART 1: INTRODUCTION AND KEY PRINCIPLES      

1. Introduction: What Is Economics? 

2. The Key Principles of Economics 

3. Exchange and Markets 

4. Demand, Supply, and Market Equilibrium 

PART 2: THE BASIC CONCEPTS IN MACROECONOMICS

5. Measuring a Nation’s Production and Income 

6. Unemployment and Inflation 

PART 3: THE ECONOMY IN THE LONG RUN

7. The Economy at Full Employment 

8. Why Do Economies Grow? 

PART 4: ECONOMIC FLUCTUATIONS AND FISCAL POLICY

9. Aggregate Demand and Aggregate Supply 

10. Fiscal Policy 

11. The Income-Expenditure Model 

12.  Investment and Financial Markets 

PART 5: MONEY, BANKING, AND MONETARY POLICY

13. Money and the Banking System 

14. The Federal Reserve and Monetary Policy 

PART 6: INFLATION, UNEMPLOYMENT, AND ECONOMIC POLICY

15. Modern Macroeconomics: From the Short Run to the Long Run 

16. The Dynamics of Inflation and Unemployment 

17. Macroeconomic Policy Debates 

PART 7: THE INTERNATIONAL ECONOMY  

18. International Trade and Public Policy 

19. The World of International Finance 

PART 8: A CLOSER LOOK AT DEMAND AND SUPPLY          

20. Elasticity: A Measure of Responsiveness 

21. Market Efficiency and Government Intervention 

22. Consumer Choice: Utility Theory and Insights from Behavioral Economics 

PART 9: MARKET STRUCTURES AND PRICING       

23. Production Technology and Cost 

24. Perfect Competition 

25. Monopoly and Price Discrimination 

26. Market Entry and Monopolistic Competition 

27. Oligopoly and Strategic Behavior 

28. Controlling Market Power: Antitrust and Regulation 

PART 10: EXTERNALITIES AND INFORMATION      

29. Imperfect Information: Adverse Selection and Moral Hazard 

30. Public Goods and Public Choice 

31. External Costs and Environmental Policy 

PART 11: THE LABOR MARKET AND INCOME DISTRIBUTION         

32. The Labor Market and the Distribution of Income