Economics (McConnell) AP Edition, 19th Edition

New and Improved

• Restructured Introductory Chapters: In response to reviewers, the five introductory chapters common to all versions of the book have been restructured as follows:
  • Part 1 contains Chapter 1(Limits, Alternatives, and Choices) and Chapter 2 (The Market System and the Circular Flow).
  • Part 2 now consists of three chapters: Chapter 3 (Demand, Supply, and Market Equilibrium), Chapter 4 (Elasticity), and Chapter 5 (Market Failures: Public Goods and Externalities).
    • The chapters in Part 2 are more concept-oriented and analytical rather than general and descriptive as they were in the previous edition.
    • This allows the elasticity chapter to immediately follow the supply and demand chapter.
    • This also puts the elasticity chapter into Macroeconomics for those who cover this concept in their macro course.
    • This new organization eliminates the mainly descriptive Chapter 4 on the private and public sectors and moves the relevant content to where it fits more closely with related micro and macro materials.
    • The 19th edition provides a single chapter on international trade, rather than two separate chapters that have overlapping coverage (Chapter 37 in the 19th edition rather than Chapters 5 and 37 in the 18th edition).
    • The new edition boosts the analysis of market failures (public goods and externalities) in the introductory sections to complement and balance the introduction to the market system discussed in Chapter 2.
  • For micro instructors, the new ordering provides a clear supply-and-demand path to the subsequent chapters on consumer and producer behavior.
  • For macro instructors, the new ordering provides the option of assigning elasticity or market failures or both. And because this content is both optional and modular, macro instructors can also skip it and move directly to the macroeconomic analysis.
  • The content on the United States in the global economy that appeared in Chapter 5 of the 18th edition is now integrated into Chapter 37 (International Trade).
• Chapter 37 draws only on production possibilities analysis and supply and demand analysis, so it can be assigned at any point after Chapter 3 (Demand, Supply, and Market Equilibrium).
• Therefore, instructors who want to introduce international economics early in their courses can assign Chapter 37 within the introductory chapters found in Parts 1 and 2.
• For instructors who prefer Chapter 5 of the prior edition to Chapter 37 of the new edition, the authors have fully updated the previous Chapter 5 content and made it freely available for viewing and printing at both the instructor and student portions of our Web site. This substitute for Chapter 37, called Content Option for Instructors #1: The United States and the Global Economy, is fully supported by both the instructor supplement package and the student supplement package.
  
  
• New discussions of the financial crisis, the recession, and policy response appear throughout Chapters 23-34, including:
  • The use of the recession as a timely application of how a decline in aggregate expenditures can produce a recessionary expenditure gap and a highly nega­tive GDP gap in Chapter 28 (The Aggre­gate Expenditures Model).
  • The use of the recession as an application of how negative demand shocks can produce large declines in real output with no or very little deflation in Chapter 29 (Aggregate Demand and Ag­gregate Supply).
  • A major new section in Chapter 31 (Money, Banking, and Financial Institu­tions) with emphasis on the mortgage debt crisis, mortgage-backed securities, failures and near-failures of financial firms, the Treasury’s TARP rescue, the Fed’s extraordinary use of lender-of-last-resort facilities, and the Wall Street Reform and Consumer Protection Act of 2010.
  • Several new discussions relating to Fed policies during the recession, including a new discussion on the liquidity trap, in Chapter 33 (Interest Rates and Monetary Policy).
  • Several new “Consider This” examples related to the financial crisis and the recession.
    
    
• New content on Behavioral Economics: New material covering the consumer-choice aspects of behavioral economics has been added to the end of the chapter on Consumer Behavior (Chapter 6), covering prospect theory, framing effects, loss aversion, anchoring effects, mental accounting, and the endowment effect. The behavioral economics theory and examples are tightly focused on consumer-choice applications so as to flow smoothly from, and build upon, the standard utility-maximization theory and applications developed earlier in the chapter.
  
  
• New Public Finance chapter: This traditional public finance chapter adds considerable new content to existing material that previously appeared in Chapter 4 (The U.S. Economy: Private and Public Sectors) and Chapter 17 (Public Choice Theory and the Economics of Taxation) of the 18th edition.
  • The material adopted from the previous edition includes a circular flow diagram with government; an overview of Federal, state, and local tax revenues and expenditures; explanations of marginal and average tax rates; discussions of the benefits-received and ability-to-pay principles of taxation; an explanation of progressive, regressive, and proportional taxes; discussion of tax incidence and efficiency losses due to taxation; and coverage of the redistributive incidence of the overall tax-spending system in the United States.
• New material includes a short section on government employment that is built around two pie charts, the first giving a breakdown of what fractions of state and local government employees are dedicated to certain tasks and the second giving a similar accounting for Federal government employees.
  
  
• Divided Pure Competition Chapter: The very long pure competition chapter (Chapter 9 of the 18th edition) is now divided into two logically distinct chapters, one on pure competition in the short run (Chapter 8) and the other on pure competition in the long run (Chapter 9). These more “bite-sized” chapters should improve student retention of the material.
  
  
• Reworked End-of-chapter Questions and Problems: End-of-chapter study questions have been split into questions, which are more analytic and free-response, and problems, which are quantitative. Many new problems have been added, and the questions and problems continue to be aligned with the chapter learning objectives.
  
  
• New “Consider This” and “Last Word” examples:
  • “Consider This” boxes offer student-oriented real world examples to help reinforce important economic concepts and themes. There are 16 new “Consider This” boxes in the 19th edition.
• “Last Word” sections are real world applications or case studies at the end of each chapter. There are 10 new “Last Word” sections in the 19th edition.
  
  
• Current Discussions & Examples Throughout: The19th edition of refers to and discusses many current topics. Examples include: the cost of the war in Iraq; aspects of behavioral economics; applications of game theory; the most rapidly expanding and disappearing U.S. jobs; oil and gasoline prices; cap-and-trade systems and carbon taxes; the value-added tax; the Food, Conservation, and Energy Act of 2008; consumption versus income inequality; the Patient Protection and Affordable Care Act (PPACA) of 2010; immigration issues; China’s continued rapid growth; the severe recession of 2007–2009; the paradox of thrift; the stimulus package of 2008; ballooning Federal budget deficits and public debt; the long-run funding shortfalls in Social Security and Medicare; securitization and the mortgage debt crisis; the Wall Street Reform and Consumer Protection Act of 2010; recent Fed monetary policy; the liquidity trap; the Fed’s new term auction facility; the Fed’s payment of interest on required reserves; the Taylor rule in relation to Fed policy; the jump in the size of the Fed’s balance sheet; U.S. trade deficits; off-shoring of American jobs; trade adjustment assistance; the European Union and the Euro Zone; changes in exchange rates; and many other current topics.
  
  
• Available with a fully-loaded version of McGraw-Hill’s Connect Plus Economics including:
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• LearnSmart
• Video Cases
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• Built-In Study Guide
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• Integrated eBook
• Extensive Reporting