Price Theory and Applications challenges students to master the economic way of understanding the world, with equal emphasis on intuition and precise logic, and special emphasis on the interplay between them. The writing is inviting, humorous, and sometimes folksy, without sacrificing the insistence that arguments need to be airtight. Important concepts are introduced via entertaining examples and fleshed out with rigor.

The learning experience is supported by a vast number of intriguing and entertaining exhibits, examples, numerical exercises, and problem sets, some integrated within the text and others included at the end of chapters. The problems vary widely in their demands on students — some are straightforward applications of the theory, while others require a great deal of creativity and a willingness to think considerably outside the box.

Contents:

• Supply, Demand, and Equilibrium
• Prices, Costs, and the Gains from Trade
• The Behavior of Consumers
• Consumers in the Marketplace
• The Behavior of Firms
• Production and Costs
• Competition
• Welfare Economics and the Gains from Trade
• Knowledge and Information
• Monopoly
• Market Power, Collusion, and Oligopoly
• The Theory of Games
• External Costs and Benefits
• Common Property and Public Goods
• The Demand for Factors of Production
• The Market for Labor
• Allocating Goods Over Time
• Risk and Uncertainty
• What is Economics?

Readership: Undergraduate students studying microeconomics or price theory.

Key Features:

• Strong emphasis on intuition, logical rigor, and the interplay between them
• Warm, humorous, and inviting writing style
• Wide range of problem sets, some straightforward and others requiring not just mastery of the material but a willingness to apply that material creatively
• Several pedagogical innovations, including "dangerous curve" sections that warn the student when the material immediately preceding is subtler than it might first appear
• Strong emphasis on social welfare, including market failures, the role of information, property rights, and rules of law
• Extensive instructors' manual giving not just the correct answers to all the problems, but also discussions of the most common incorrect answers and explanations of why those answers are wrong
• Flexible structure so that instructors who want to skip some of the more technical material can easily do so