A Primer on Microeconomics, Volume I: Fundamentals of Exchange

153 Pages·2018·1.664 MB·English

by  Thomas M. Beveridge

THE BUSINESS A Primer on Microeconomics, B Economics and Public Policy Collection
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EXPERT PRESS V
Volume I E Philip J. Romero and Jeffrey A. Edwards, Editors
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BUSINESS STUDENTS
Curriculum-oriented, born- Thomas M. Beveridge
digital books for advanced A Primer on
Economics, far from being the dismal science, offers us valuable
business students, written
by academic thought lessons that can be applied to our everyday experiences. At its
leaders who translate real- heart, economics is the scientifi c study of choice and a study of Microeconomics,
world business experience economic principles allows us to achieve a more informed un-
into course readings and derstanding of how we make our choices; whether these choices
reference materials for Volume I
occur in our everyday life or in our work environment.
students expecting to tackle
This two-volume text represents a common sense approach
management and leadership
challenges during their to basic microeconomics. Volume one, Fundamentals of Exchange, Fundamentals
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professional careers. delivers clear statements of essential economic principles and
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POLICIES BUILT models of exchange, with easy to understand examples. The un- RI of Exchange
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BY LIBRARIANS derlying goal is to provide a concise readable primer that covers
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usage the assumption of rationality; the need for choice; opportunity N
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the meaning of economic effi ciency in the competitive and re- C
• Perpetual access for a R
stricted markets; applications of elasticity; and develops and O
one-time fee E
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maintenance fees N
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• No license to execute ples of macroeconomics for over 30 years. Currently, he is an in-
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The Digital Libraries are a structor of economics at Durham Technical Community College S
comprehensive, cost-eff ective in North Carolina. He received an award for Teaching Excellence , V
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way to deliver practical while at North Carolina State University, and holds dual mas- L
treatments of important ter’s degrees in economics and in education from the University UM Thomas M. Beveridge
business issues to every E
of Dundee in the United Kingdom; in addition, he has undertak- I
student and faculty member.
en PhD studies at the University of North Carolina at Chapel Hill.
He has had published student learning and teaching materials,
has acted as a reviewer for several major principles of econom-
For further information, a ics textbooks, and has authored an innovative audio presenta-
free trial, or to order, contact:  tion of principles of economics for VangoNotes.
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www.businessexpertpress.com/librarians Economics and Public Policy Collection
Philip J. Romero and Jeffrey A. Edwards, Editors
A Primer on
Microeconomics, Volume I

A Primer on
Microeconomics, Volume I
Fundamentals of Exchange
Second Edition
Thomas M. Beveridge
A Primer on Microeconomics, Volume I: Fundamentals of Exchange
Copyright © Business Expert Press, LLC, 2018.
All rights reserved. No part of this publication may be reproduced, stored
in a retrieval system, or transmitted in any form or by any means—
electronic, mechanical, photocopy, recording, or any other except for
brief quotations, not to exceed 250 words, without the prior permission
of the publisher.
First published in 2018 by
Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com
ISBN-13: 978-1-63157-727-7 (paperback)
ISBN-13: 978-1-63157-728-4 (e-book)
Business Expert Press Economics and Public Policy Collection
Collection ISSN: 2163-761X (print)
Collection ISSN: 2163-7628 (electronic)
Cover and interior design by S4Carlisle Publishing Services Private Ltd.,
Chennai, India
First edition: 2013
Second edition: 2018
10 9 8 7 6 5 4 3 2 1
Printed in the United States of America.
Abstract
Economics, far from being the “dismal science,” offers us valuable lessons
that can be applied to our everyday experiences. At its heart, economics
is the science of choice and a study of economic principles that allows us
to achieve a more informed understanding of how we make our choices,
regardless of whether these choices occur in our everyday life, in our work
environment, or at the national or international level.
The present two-volume text represents a commonsense approach
to basic microeconomic principles. It is directed toward all students,
but particularly toward those within business school settings, including
students beginning an advanced business degree course of study. It will
deliver clear statements of essential economic principles, supported by
easy-to-understand examples, and uncluttered by extraneous material, the
goal being to provide a concise readable primer that covers the substance
of microeconomic theory.
Over the course of the two volumes, the text will look at the effi-
cient operation of competitive markets and what may cause those markets
to fail, the benefits derived from trade, profit maximization, the conse-
quences of choice, and the implications of imperfect competition.
Keywords
comparative advantage, consumer surplus, demand and supply, economic
efficiency, elasticity, equilibrium, imperfect competition, marginal ben-
efit, market failures, , monopoly, opportunity cost, perfect competition,
producer surplus, profit maximization

Contents
Preface ..................................................................................................ix
Acknowledgments ...................................................................................xi
Chapter 1 Scarcity and Choice...........................................................1
Chapter 2 Demand and Supply .......................................................37
Chapter 3 More on Markets ............................................................67
Chapter 4 Elasticity .......................................................................105
About the Author ................................................................................129
Index .................................................................................................131

Preface
This two-volume Primer on Microeconomics has been long in the writ-
ing. It has been shaped by after-class discussions with students over many
years while we tried to break down economics into understandable con-
cepts and examples. A former student, Dr. Jeff Edwards, now Chairman
of the Economics Department at North Carolina A&T State University,
requested that I write an introductory text, and advised, “Make it like
your lectures.”
No book, at least no book that I’m capable of writing, can capture
the immediacy and intimacy of a classroom environment, but equally, no
classroom environment permits the opportunity to dwell on detail quite
as effectively as the pages of a book. As with everything in economics,
there are trade-offs.
I’ve devised this Primer to help you to master the concepts in what
may to be your first, and perhaps only, economics course. I’ve given you
opportunities to apply these concepts in real-world situations. Most econ-
omists stress the need for competence in three major areas—the applica-
tion of economic concepts to real-world situations, the interpretation of
graphs, and the analysis of numerical problems.
Throughout the text, I’ve attempted to maintain the sense of a
dialogue—there are frequent “THINK IT THROUGH” pauses, with
which you can review and check your grasp of the topic under discussion
and relate it to real-world applications.
I hope that this book will ignite in you a passion for economics that
will blaze for a lifetime. Economics surrounds us—it fills the airwaves, our
daily lives, our hopes and dreams. Learning how to apply economic con-
cepts to our world creates a better and more durable understanding, and
a reasonable goal for a noneconomics major is to have sufficient insight
to evaluate the economic content of articles in The Wall Street Journal or
The Economist or the views expressed by commentators on CNN or Fox.