1.3 Preface

An Innovative Modular Format

For a long while, we have been hearing from instructors who wanted to use the Krugman/Wells text in their principles course, but needed a less comprehensive version: a book that was shorter overall, with less meaty chapters, and with a focus on the essential principles of economics and less in the way of theory and analytics. We’ve responded to these requests, and you are holding the result in your hands.

Microeconomics in Modules is a streamlined textbook that incorporates an innovative format geared toward how students learn today. Instead of tackling 24 chapters of about 25 to 40 pages each, students encounter 6- to 10-page modules designed to be read in a single sitting. What exactly is a module? We think users and reviewers have come up with the best definition. They consistently describe modules as “short, digestible chunks” of text that students actually read. We should also add that shorter does not mean taking shortcuts. Although each module is a short, easy-to-manage reading assignment, each is also informative and thorough, with adequate rigor.

This text includes carefully crafted pedagogy that works within the modular format to enhance the student learning experience. The modular format offers a unique opportunity for structured learning and assessment. Each module concentrates on a specific topic using a learning-objectives approach and then concludes with three types of self-assessment questions: “Check Your Understanding” and multiple-choice questions that allow students to test their comprehension of module content, followed by critical-thinking questions that encourage reflection and analysis. Answers to these questions appear at the end of the book, so students can actually see how well they’ve mastered concepts.

There is additional opportunity for assessment at the end of each section (a section is a grouping of modules): thoughtful problems that test related concepts across all of the modules in a section, encouraging students to make connections among ideas as well apply and practice what they’ve learned.

We’ve also refined the modular structure in this edition to offer even greater flexibility. We’ve added six new sections to help unpack some of the more module-heavy sections. The result is more focused sections with fewer modules in each. Important topics like elasticity, efficiency, government policy, and monopoly are contained within their own sections, making it easier for instructors to assign the topics they want to teach without having to break chapters apart, which can undermine narrative flow and diminish comprehension. We’ve also added two sections covering completely new topics, which we’ll get to shortly. And, we hope that because sections (and the modules within them) are brief, instructors may be able to find the time to cover some of the more compelling and interesting material that too often gets cut from the course because of time constraints.

The Science Behind Modules

We see it for ourselves, we have heard it from reviewers, and the research confirms it: students are reading less, for shorter periods of time, and they continue to struggle with comprehension. So, when we began thinking about the idea of developing a more streamlined principles text, we also thought a lot about the best way to format it.

The modular format, which is popular in other disciplines, appealed to us. It was in keeping with the findings of cognitive psychologists who have demonstrated that comprehension is best attained when material is “chunked” into smaller reading assignments, reinforced with frequent questioning (the “testing effect”), and incentivized by a sense of accomplishment earned from completing discrete reading tasks. These findings are at the heart of the modular format of this text and its pedagogy.

Comments from users seem to confirm the benefits of this new way of presenting economic concepts. Each user reported an almost identical story: students were actually completing their reading assignments, something that was rare when traditional textbook chapters were assigned. Their feeling was that students were also taking advantage of the end-of-module self-assessment questions. Overall, they found students coming to lectures better prepared. And, each of these users couldn’t imagine returning to a textbook with a more traditional format.

This result makes intuitive sense. Why wouldn’t students prefer to read short modules instead of long chapters? Of course it would enrich the learning experience if students could check their comprehension more frequently, at the end of short modules. For a more up-close look at the text’s format and feature set, see the walk through on pages xx—xxiii.

About the Revision

We’ve made several changes in this edition to keep it current and relevant, while retaining the narrative approach. There are a few new modules, a new feature, and many updates.

New Modules

A new section (with two new modules) on decision making and behavioral economics We devote an entire new section to this important topic: Section 7, “Economics and Decision Making.” It includes two new modules. The first new module is on the types of decisions made by individuals and firms, as well as the process of making decisions that leads to the best possible economic outcomes. The second new module, on behavioral economics, looks at types of irrational decision making. We’ve also moved our module on utility maximization into this section to round out the coverage.

This section was added because many instructors are now covering the groundbreaking perspective on irrational decision making in their principles courses. Originating in the research of Amos Tversky and Nobel laureate Daniel Kahneman, and further developed by a new generation of economists, this is a topic area that gets students excited about economics because it’s so true to life and relevant. In fact, in the opening story for the section, we tell the story of an actual student who was faced with a big, life-defining decision after graduating from college.

We firmly believe that by learning how people make persistently irrational choices, students gain a deeper understanding of what constitutes rational economic decision making.

Four new modules—on taxes, international trade, and the welfare state New Module 15, “Taxes,” has allowed us to devote a separate module to this topic and expand our coverage to include more detail on tax rates and revenues.

New Section 6, “International Trade,” includes two new fully integrated and up-to-date modules: Module 16, “Gains from Trade,” and Module 17, “Supply, Demand, and International Trade.”

New Module 39, “The Economics of the Welfare State,” addresses a timely topic that is very much in the news and of particular importance to us. This module includes completely new, current coverage of health care policy as well as a fully updated discussion of poverty, inequality, and welfare state programs.

New Feature: Business Case Studies

Now, more than ever, students need a strong understanding of economic principles and their applications to business decisions. To meet this need, virtually every section now concludes with a real-world business case that illustrates how the economic principles just covered play out in the world of entrepreneurs and bottom lines.

The cases are wide-ranging and provide insight into business decision making at American and global companies, both large and small. They include an examination of how lean production techniques at Boeing and Toyota increased efficiency at both companies and led to a worldwide manufacturing revolution. (Section 1: “Efficiency, Opportunity Cost, and the Logic of Lean Production at Boeing”). There is a look at how producers evaluate costs to make hiring decisions (Section 8: “Kiva Systems’ Robots versus Humans: The Challenge of Holiday Order Fulfillment”). A very timely case, and one of our personal favorites, is the story of the incredibly successful “supply chain manager,” Li & Fung, which has made billions because of their comparative advantage in getting the clothes we wear into stores (Section 6: “Li & Fung: From Guangzhou to You”).

Each case concludes with “Questions for Thought” that help students engage more deeply with economic concepts by seeing them applied in actual business situations. A list of the new Business Cases appears on the inside front cover.

Extensive Updates

This edition includes 20 new “Economics in Actions” (formerly called “In Real Life”). Virtually every module includes at least one “Economics in Action” feature. Many of our section-opening stories have been updated, and three of them are new to this edition. In addition, we have updated examples, data, and applications throughout.

It is important to us to emphasize currency and to use stories from real life and the news. This makes every revision a work-intensive endeavor, but we believe that being current drives student interest.