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Writing about economics at Marginal Revolution taught us to use vivid examples and to get to the point quickly. We brought these skills to our textbook, Modern Principles of Economics.

From the first sentence, The prisoners were dying of scurvy, typhoid fever, and smallpox, but nothing was killing them more than bad incentives. to the last, no other textbook teaches the economic way of thinking so well or so memorably.

Modern Principles means modern content and modern delivery. We cover material that many other textbooks ignore, such as how managers should choose between piece rates and tournaments and how firms can increase their profits using clever forms of price discrimination such as bundling and tying. In macroeconomics, we have created a simple yet powerful AD-AS model that combines insights from New Keynesian and Real Business Cycle models. We have also created the Super Simple Solow model which for the first time makes the Solow model of economic growth accessible to principles of economics students.

Tyler Cowen is Holbert C. Harris Professor of Economics at George Mason University and Director of the Mercatus Center and the James M. Buchanan Center for Political Economy. He is published widely in economics journals, including the American Economic Review and Journal of Political Economy. With Alex Tabarrok he co-writes the Marginal Revolution blog, often ranked as the #1 economics blog. He is also the author of Discover Your Inner Economist (Dutton, 2007) and numerous other books on economics. He writes regularly for the popular press on economics, including for The New York Times, The Washington Post, Forbes, and The Wilson Quarterly. University web page: http://economics.gmu.edu/faculty/tcowen.html WATCH: Tyler Cowen at the Economic Bloggers Forum.

Alex Tabarrok is Bartley J. Madden Chair in Economics at the Mercatus Center at George Mason University and director of research for The Independent Institute. Tabarrok is co-author with Tyler Cowen of the popular economics blog, Marginal Revolution. His recent research looks at bounty hunters, judicial incentives and elections, crime control, patent reform, methods to increase the supply of human organs for transplant, and the regulation of pharmaceuticals. He is the editor of the books, Entrepreneurial Economics: Bright Ideas from the Dismal Science; The Voluntary City: Choice, Community, and Civil Society; and Changing the Guard: Private Prisons and The Control of Crime. His papers have appeared in the Journal of Law and Economics, Public Choice, Economic Inquiry, Journal of Health Economics, Journal of Theoretical Politics, The American Law and Economics Review, Kyklos and many other journals. His popular articles have appeared in The New York Times, The Wall Street Journal, and many other magazines and newspapers.

Preface
1. The Big Ideas in Economics
2. The Power of Trade and Comparative Advantage

Part 1: Supply and Demand
3. Supply and Demand
4. Equilibrium: How Supply and Demand Determine Prices
5. Elasticity and Its Applications
6. Taxes and Subsidies

Part 2: The Price System
7. The Price System: Signals, Speculation, and Prediction
8. Price Ceilings and Floors
9. International Trade
10. Externalities: When the Price Is Not Right

Part 3: Firms and Factor Markets
11. Costs and Profit Maximization under Competition
12. Competition and the Invisible Hand
13. Monopoly
14. Price Discrimination and Pricing Strategy
15. Oligopoly and Game Theory
16. Competing for Monopoly: The Economics of Network Goods
17. Monopolistic Competition and Advertising
18. Labor Markets

Part 4: Government
19. Public Goods and the Tragedy of the Commons
20. Political Economy and Public Choice
21. Economics, Ethics, and Public Policy

Part 5: Decision Making for Businesses, Investors, and Consumers
22. Managing Incentives
23. Stock Markets and Personal Finance
24. Asymmetric Information: Moral Hazard and Adverse Selection
25 Consumer Choice

Part 6: Economic Growth
26 GDP and the Measurement of Progress
27 The Wealth of Nations and Economic Growth
28 Growth, Capital Accumulation, and the Economics of Ideas: Catching Up vs. the Cutting Edge
29 Saving, Investment, and the Financial System

Part 7: Business Fluctuations
30 Unemployment and Labor Force Participation
31 Inflation and the Quantity Theory of Money
3. Business Fluctuations: Aggregate Demand and Supply
33. Transmission and Amplification Mechanisms

Part 8: Macroeconomic Policy and Institutions
34. The Federal Reserve System and Open Market Operations
35. Monetary Policy
36. The Federal Budget: Taxes and Spending
37. Fiscal Policy

Part 9: International Economics
38 International Finance

APPENDIX A Reading Graphs and Making Graphs
APPENDIX B Solutions to Check Yourself
Glossary G-1
References R-1
Index I-1
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