www.macmillanhighered.com/launchpad/krugmanwellsecon4

Our new course space, combines an interactive e-Book with high-quality multimedia content and readymade assessment options, including LearningCurve adaptive quizzing. Prebuilt, curated units are easy to assign or adapt with your own material, such as readings, videos, quizzes, discussion groups, and more. LaunchPad also provides access to a gradebook that provides a clear window on performance for your whole class, for individual students, and for individual assignments.

is an adaptive quizzing engine that automatically adjusts questions to the student’s mastery level. With LearningCurve activities, each student follows a unique path to understanding the material. The more questions a student answers correctly, the more difficult the questions become. Each question is written specifically for the text and is linked to the relevant e-Book section. LearningCurve also provides a personal study plan for students as well as complete metrics for instructors. Proven to raise student performance, LearningCurve serves as an ideal formative assessment and learning tool. For detailed information, visit http://learningcurveworks.com.

NEW Work It Out Tutorials New to this edition, these tutorials guide students through the process of applying economic analysis and math skills to solve the final problem in each chapter. Choice-specific feedback and video explanations provide students with interactive assistance for each step of the problem.

Economics in Action Based on the feature from the text, these real-life applications are accompanied by assessment and links to additional data.

Living Graphs Based on figures from the text, Living Graphs are animated and interactive graphs that first demonstrate a concept to students and then ask them to manipulate the graph or answer questions to check understanding.

Interactive Tutorials These interactive modules are designed to teach students key principles and concepts through example problems, animated graphs, and interactive activities.

Graphing Questions As a further question bank for instructors building assignments and tests, the electronically gradable graphing problems utilize our own robust graphing engine. In these problems, students will be asked to draw their response to a question, and the software will automatically grade that response. Graphing questions are tagged to appropriate textbook sections and range in difficulty level and skill.

Test Bank The Test Bank, coordinated by Doris Bennett, Jacksonville State University, provides a wide range of questions appropriate for assessing your students’ comprehension, interpretation, analysis, and synthesis skills. The Test Bank offers multiple-choice, true/false, and short-answer questions designed for comprehensive coverage of the text concepts. Questions are categorized according to difficulty level (easy, moderate, and difficult) and skill descriptor (definitional, conceptbased, critical thinking, and analytical thinking) and are tagged to their appropriate textbook section.

End-of-Chapter Problems The end-of-chapter problems from the text have been converted to a multiple-choice format with answer-specific feedback. These problems can be assigned in homework assignments or quizzes.

Practice and Graded Homework Assignments Each LaunchPad unit contains prebuilt assignments, providing instructors with a curated set of multiple-choice and graphing questions that can be easily assigned for practice or graded assessment.

Instructor’s Resource Manual The Instructor’s Resource Manual, revised by Nora Underwood, University of Central Florida, is a resource meant to provide materials and tips to enhance the classroom experience as it provides chapter objectives, chapter outlines, and teaching tips and ideas.

Solutions Manual Prepared by the authors of the text, the Solutions Manual contains detailed solutions to all of the end-of-chapter problems from the textbook. Solutions to business case study Questions for Thought are also provided.

Interactive Presentation Slides This set of Interactive Presentation slides, designed by Solina Lindahl, CalPoly San Luis Obispo, is available as an alternative to traditional lecture outline slides. The slides are brief, interactive, and visually interesting to keep students’ attention in class. They offer instructors the following:

Aplia Worth/Aplia courses are all available with digital textbooks, interactive assignments, and detailed feedback. For a preview of Aplia materials and to learn more, visit www.aplia.com/worth.

www.saplinglearning.com

Sapling Learning provides the most effective interactive homework and instruction that improves student-learning outcomes for the problem-solving disciplines.

We are indebted to the following reviewers, class testers, focus group participants, and other consultants for their suggestions and advice on previous editions.

Carlos Aguilar, El Paso Community College

Giuliana Campanelli Andreopoulos, William Patterson University

Seemi Ahmad, Dutchess Community College

Terence Alexander, Iowa State University

Morris Altman, University of Saskatchewan

Farhad Ameen, State University of New York, Westchester Community College

Dean Baim, Pepperdine University

Christopher P. Ball, Quinnipiac University

David Barber, Quinnipiac College

Janis Barry-Figuero, Fordham University at Lincoln Center

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Scott Beaulier, Mercer University

David Bernotas, University of Georgia

Marc Bilodeau, Indiana University and Purdue University, Indianapolis

Kelly Blanchard, Purdue University

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Douglas M. Brown, Georgetown University

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Charles Campbell, Mississippi State University

Douglas Campbell, University of Memphis

Randall Campbell, Mississippi State University

Kevin Carlson, University of Massachusetts, Boston

Joel Carton, Florida International University

Andrew Cassey, Washington State University

Shirley Cassing, University of Pittsburgh

Sewin Chan, New York University

Mitchell M. Charkiewicz, Central Connecticut State University

Joni S. Charles, Texas State University, San Marcos

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Hayley H. Chouinard, Washington State University

Abdur Chowdhury, Marquette University

Kenny Christianson, Binghamton University

Lisa Citron, Cascadia Community College

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Thomas E. Cooper, Georgetown University

Cesar Corredor, Texas A&M University and University of Texas, Tyler

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Jim F. Couch, University of Northern Alabama

Maria DaCosta, University of Wisconsin, Eau Claire

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H. Evren Damar, Pacific Lutheran University

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Greg Delemeester, Marietta College

Patrick Dolenc, Keene State College

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Ding Du, South Dakota State University

Jerry Dunn, Southwestern Oklahoma State University

Robert R. Dunn, Washington and Jefferson College

Ann Eike, University of Kentucky

Harold Elder, University of Alabama

Tisha L. N. Emerson, Baylor University

Hadi Salehi Esfahani, University of Illinois

William Feipel, Illinois Central College

Rudy Fichtenbaum, Wright State University

David W. Findlay, Colby College

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Sherman Folland, Oakland University

Robert Francis, Shoreline Community College

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Robert Gazzale, Williams College

Satyajit Ghosh, University of Scranton

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Marvin Gordon, University of Illinois at Chicago

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Alan Day Haight, State University of New York, Cortland

Mehdi Haririan, Bloomsburg University

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Michael Hilmer, San Diego State University

Tia Hilmer, San Diego State University

Jane Himarios, University of Texas, Arlington

Jim Holcomb, University of Texas, El Paso

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Alexander Holmes, University of Oklahoma

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Robert N. Horn, James Madison University

Scott Houser, Colorado School of Mines

Steven Husted, University of Pittsburgh

Hiro Ito, Portland State University

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Roger T. Kaufman, Smith College

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Herb Kessel, St. Michael’s College

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Michael Kimmitt, University of Hawaii, Manoa

Robert Kling, Colorado State University

Colin Knapp, University of Florida

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Charles Kroncke, College of Mount Saint Joseph

Reuben Kyle, Middle Tennessee State University (retired)

Katherine Lande-Schmeiser, University of Minnesota, Twin Cities

Vicky Langston, Columbus State University

Richard B. Le, Cosumnes River College

Yu-Feng Lee, New Mexico State University

David Lehr, Longwood College

Mary Jane Lenon, Providence College

Mary H. Lesser, Iona College

Solina Lindahl, California Polytechnic Institute, San Luis Obispo

Haiyong Liu, East Carolina University

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Akira Motomura, Stonehill College

Gary Murphy, Case Western Reserve University

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Robert Murphy, Boston College

Ranganath Murthy, Bucknell University

Anna Musatti, Columbia University

Christopher Mushrush, Illinois State University

Anthony Myatt, University of New Brunswick, Canada

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Nick Noble, Miami University (Ohio)

Thomas A. Odegaard, Baylor University

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Maxwell Oteng, University of California, Davis

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Jeff Owen, Gustavus Adolphus College

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James Palmieri, Simpson College

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Michael Perelman, California State University, Chico

Nathan Perry, Utah State University

Brian Peterson, Central College

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Ken Peterson, Furman University

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Michael Polcen, Northern Virginia Community College

Linnea Polgreen, University of Iowa

Raymond A. Polchow, Zane State College

Eileen Rabach, Santa Monica College

Matthew Rafferty, Quinnipiac University

Jaishankar Raman, Valparaiso University

Margaret Ray, Mary Washington College

Helen Roberts, University of Illinois at Chicago

Jeffrey Rubin, Rutgers University, New Brunswick

Rose M. Rubin, University of Memphis

Lynda Rush, California State Polytechnic University, Pomona

Michael Ryan, Western Michigan University

Sara Saderion, Houston Community College

Djavad Salehi-Isfahani, Virginia Tech

Jesse A. Schwartz, Kennesaw State University

Chad Settle, University of Tulsa

Steve Shapiro, University of North Florida

Robert L. Shoffner III, Central Piedmont Community College

Joseph Sicilian, University of Kansas

Judy Smrha, Baker University

John Solow, University of Iowa

John Somers, Portland Community College

Stephen Stageberg, University of Mary Washington

Monty Stanford, DeVry University

Rebecca Stein, University of Pennsylvania

William K. Tabb, Queens College, City University of New York (retired)

Sarinda Taengnoi, University of Wisconsin, Oshkosh

Henry Terrell, University of Maryland

Rebecca Achée Thornton, University of Houston

Michael Toma, Armstrong Atlantic State University

Brian Trinque, University of Texas, Austin

Boone A. Turchi, University of North Carolina, Chapel Hill

Nora Underwood, University of Central Florida

J. S. Uppal, State University of New York, Albany

John Vahaly, University of Louisville

Jose J. Vazquez-Cognet, University of Illinois, Urbana–Champaign

Daniel Vazzana, Georgetown College

Roger H. von Haefen, North Carolina State University

Andreas Waldkirch, Colby College

Christopher Waller, University of Notre Dame

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Robert Whaples, Wake Forest University

Thomas White, Assumption College

Jennifer P. Wissink, Cornell University

Mark Witte, Northwestern University

Kristen M. Wolfe, St. Johns River Community College

Larry Wolfenbarger, Macon State College

Louise B. Wolitz, University of Texas, Austin

Gavin Wright, Stanford University

Bill Yang, Georgia Southern University

Jason Zimmerman, South Dakota State University

Our deep appreciation and heartfelt thanks to the following reviewers, whose input helped us shape this fourth edition.

Innocentus Alhamis, Southern New Hampshire University

Becca Arnold, San Diego Mesa College

Dean Baim, Pepperdine University

Jeremy Baker, Owens Community College

Jim Barbour, Elon University

Richard Beil, Auburn University

Joydeep Bhattacharya, Iowa State University

Joanne Blankenship, State Fair Community College

Emma Bojinova, Canisius College

Milica Bookman, Saint John’s University

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Bruce Gervais, California State University-Sacramento

Stuart Glosser, University of Wisconsin at Whitewater

Julie Gonzalez, University of California-Santa Cruz

Robert Harris, Indiana University and Purdue University, Indianapolis

Hadley Hartman, Santa Fe College

Ryan Herzog, Gonzaga University

Scott Houser, Colorado School of Mines

Steven Husted, University of Pittsburgh

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Carl Jensen, Seton Hall University

Donn Johnson, Quinnipiac University

Elizabeth Sawyer Kelly, University of Wisconsin, Madison

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Sherrie Kossoudji, University of Michigan

Stephan Kroll, Colorado State

Liaoliao Li, Kutztown University

Solina Lindahl, California Polytechnic State University

Haiyong Liu, East Carolina University

Fernando Lozano, Claremont McKenna College

Martin Ma, Washington State University

Stephen Marks, Claremont McKenna College

Mark McBride, Miami University

Ashley Miller, Mount Holyoke College

Myra Moore, University of Georgia

Kevin Murphy, Oakland University

Steven Nafziger, Williams College

Kathryn Nantz, Fairfield University

Gerald Nyambane, Davenport University

Fola Odebunmi, Cypress College

Tomi Odegaard, University of Nevada-Reno

Tomi Ovaska, Youngstown State University

Tim Payne, Shoreline College

Sonia Pereira, Barnard College, Columbia University

David Pieper, City College of San Francisco

Paul Pieper, University of Illinois at Chicago

Arthur Raymond, Muhlenberg College

Greg Rose, Sacramento City College

Matt Rutledge, Boston College

Martin Sabo, Community College of Denver

Mikael Sandberg, University of Florida

Michael Sattinger, University at Albany

Duncan Sattler, Wilbur Wright College

Lucie Schmidt, Williams College

Zamira Simkins, University of Wisconsin-Superior

Ralph Sonenshine, American University

Daniel Talley, Dakota State University

Kerry Tan, Loyola University, Maryland

Julianne Treme, University of North Carolina at Wilmington

Nora Underwood, University of Central Florida

Lee Van Scyoc, University of Wisconsin, Oshkosh

Mark Witte, Northwestern University

Jadrian Wooten, Pennsylvania State University

A special thanks must go to Ryan Herzog, Gonzaga University, for all of his hard work and many contributions to this edition. Ryan’s role began in the manuscript stage as data researcher, continued into pages with accuracy reviewing, and has now extended to the text’s media, with his expertly prepared Work It Out items. This is the first time we’ve had the opportunity to work with Ryan, and we count ourselves extremely fortunate to have found him (thank you, Charles Linsmeier, for that). Ryan has quickly become an indispensable and tireless advisor to everyone involved in the revision. Many thanks, as well, to Annie Voy, for her consulting work with Ryan on chapters like “Externalities.” Ryan’s efforts were also supported by accuracy checkers Dixie Dalton, Southside Virginia Community College, and Janet Koscianski, Shippensburg University. Dixie and Janet began their accuracy work on the third edition of our Economics in Modules text. They are both very good at what they do, and we are so happy that they were able to continue their work with us on the fourth edition of this text. Thanks to Marilyn Freedman, as well, for her contributions.

We must also thank the many people at Worth Publishers for their contributions: vice president, editorial, Charles Linsmeier, who ably oversaw the revision and contributed throughout; Shani Fisher, our new publisher, with whom we look forward to working on this and upcoming editions; Craig Bleyer, our original publisher at Worth and now national sales director, who always puts so much effort into making each edition a success; and Sharon Balbos, executive development editor on each of our editions, for her continued dedication and professionalism while working on our chapters.

We have had an incredible production and design team on this book, people whose hard work, creativity, dedication, and patience continue to amaze us. Once again, you have outdone yourselves. Thank you all: Tracey Kuehn, Lisa Kinne, and Jeanine Furino, for producing this book; Vicki Tomaselli for the beautiful interior design and cover; Diana Blume for her assistance with design and art preparation; Deb Heimann, for her thoughtful copyedit; Barbara Seixas and Stacey Alexander, who have worked magic with the project schedule; Cecilia Varas and Elyse Rieder for photo research and the many beautiful, new images you see in this edition; Edgar Bonilla for coordinating all the production of the supplemental materials; Mary Walsh and Bruce Kaplan for their ongoing assistance; and Carlos Marin for preparing the manuscript for production.

Many thanks to Lukia Kliossis and Rachel Comerford for devising and coordinating the impressive collection of online resources for students and instructors that accompany our book. Thanks to the incredible team of writers and coordinators who worked with Lukia; we are forever grateful for your tireless efforts.

Thanks to Tom Digiano, marketing manager, for his enthusiastic and tireless advocacy of this book; to Tom Acox, digital solutions director, who once worked on this text as an editorial assistant and now, from his new perch, offers an array of creative suggestions for our book, its website, and media.

And lastly, to all of you who have introduced our books to your students and colleagues, and who continue to shape our experience as textbook authors, we welcome and encourage your feedback, formal or informal, as we look forward to future revisions.

Please send your comments to wortheconomics@macmillan.com

Paul Krugman

Paul Krugman

Robin Wells

Robin Wells