Textbook, MyEconLab, and Differences Between Editions

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1 EEP 100 Spring 2017 Jeff Perloff Microeconomic Theory with Application to Natural Resources Textbook Textbook, MyEconLab, and Differences Between Editions The assigned textbook for this course is Jeffrey M. Perloff, Microeconomics, 7 th edition, Pearson, (The 8 th edition is due out on January 2, 2017, so you may be able to get that instead. Or, you may use the 6 th edition.) Yes, I feel a little guilty about assigning my own book. However, I feel strongly that it is the best available book. I do agree with you that the book is grossly overpriced, but I cannot control that. Before buying a book, please carefully read the following it can save you money. See me if you are facing a financial hardship. Sources for Buying a New Book The UCB bookstore should be selling the book bundled with MyEconLab (which is required: see below). I ve asked them to sell the loose-leaf ( student value edition ) version of the book and possibly also the hardcover version. However, the least expensive way to get the book is to buy it directly from Pearson (the publisher) as an online version of the book, which is bundled with MyEconLab for $ I believe that it comes with an option to buy a student value edition for $60, if you later decide you need that. You may also be able to buy a foreign 7 th edition (Pearson International Edition) for less money from online bookstores. I have not seen the international edition. They may have changed the order of some of the chapters and replace some of the end-of-chapter problems with alternative problems. Possibly, they may have changed some of the Applications. However, the text is the same. Because you will then need to buy MyEconLab separately ($65), check whether this approach really saves you money. You may be able to purchase an 8 th edition online after January 2, However, you won t be able to buy it bundled with MyEconLab. The current version of MyEconLab is linked to the 7 th edition. I m told that the new 8 th edition MyEconLab version won t be available until March, 2017 (though the 7 th edition version should be very similar).

2 Warning: Because the 8 th edition is just coming out, if you buy a hard cover 7 th edition, you may have trouble selling it at the end of the term. Of course, you will no doubt want to keep the book forever (or at least until you finish taking economics courses). Alternatives If you (reasonably) don t want me to benefit financially, you have three options. First, you can read it free in the undergrad library. I have asked the library to put at least two copies on reserve (one for two hours and one for a day), and the library has other copies of various editions as well, which you may be able to check out for extended period. If more copies are needed, let me know and I will work with the library to provide them. Second, you can buy a used 6 th or 7 th edition. I do not recommend getting an earlier edition, which are missing too much of the material that I cover. (Indeed, I believe that the 7 th edition is significantly better than the 6 th edition. See below for a list of the differences.) Third, you may use an alternative textbook. The closest alternatives are Pindyck and Rubinfeld, Microeconomics, or Besanko and Braeutigam, Microeconomics (which may be in the library). If you are comfortable with calculus, you could substitute my Microeconomics: Theory and Applications with Calculus (3 rd or 4 th editions) or Walter Nicholson and Christopher M. Snyder, Microeconomic Theory: Basic Principles and Extensions (which has few applications). My calculus version is available in the library. Remember when evaluating the cost of these options, you ll need to buy MyEconLab separately. MyEconLab MyEconLab is an online web site tied to the text. MyEconLab is required for the course. You will have assigned problems in MyEconLab in lieu of most other homework assignments. I did not write the material in MyEconLab (though the problems are based on the end-of-chapter problems in the textbook), and I have no financial interest in it. MyEconLab also provides extra worked problems, solutions to other problems, extra practice exercises (with feedback), practice exams, and other resources, so that it takes the place of a student workbook. I used it for the first time last year, and most of the students really liked it. The bookstore is selling the book bundled with MyEconLab. You can also buy MyEconLab with an etext from Pearson for $ If you buy a used book or read it in library, then you should buy MyEconLab separately (available from Pearson) for $65. The following are instruction as to how to gain access to MyEconLab and how to buy it from Pearson: Login into bcourses. Click on MyLab and Mastering, which will take you to the relevant Pearson website. Under Files in bcourses is Student_Registration_Handout_Canvas_&_ MyEconLab.pdf, which tells you what to do and provides a help link. Note: If your browser does not accept third-party cookies, you ll need to add exceptions for Pearson s cookies. You can get 2

3 help with many problems at This site tells you how to obtain telephone help 24/7. Once you log onto bcourses, go to a link to the MyLab & Mastering course. The first time you connect, the site ask you to sign in or register with a login/password. If you bought the textbook/myeconlab bundle at the UCB bookstore, you would enter the access code that came with the book. Otherwise, you are sent to the payment page where you may choose a 14 day temporary access for free (so that you can try MyEconLab before deciding whether to take the course), purchase just MyEconLab (which you would do if you bought a used book), or purchase the bundle of the e-text and MyEconLab (ignore the Course ID below): Changes from the Sixth to the Seventh Edition For the seventh edition, I moderately or substantially revised and updated each chapter. Some of the major changes in the presentation of theories in the chapters include: Supply and Demand. Chapters 2 and 3 use two new empirical studies (avocados and corn) to illustrate the basic supply and demand model. They have four new and a number of revised Solved Problems. Consumer Theory. Chapters 4 and 5 have three new Solved Problems and extensive updating of data. Chapter 5 has a new section on compensating and equivalent variations. Production. Chapter 6 adds many new estimated production functions and a new discussion of returns to scale as a function of firm size. 3

4 Costs. Chapter 7 has substantially revised sections on effects of taxes on costs, long-run costs, and learning by doing. It uses a new Japanese beer empirical example to illustrate the theory, and has a new Solved Problem. Competition. Chapter 8 has new statistics and a new Solved Problem. Several sections are substantially revised, including an extended treatment of the shutdown decision. Chapter 9 updates many statistics and has substantially revised sections on rents, price effects on consumer surplus, and trade, and the Challenge Solution. The trade section uses a new empirical oil example. Monopoly. Chapter 11 is reorganized, revised, and updated, particularly the sections on market failure and the causes of monopoly. The chapter has three new Solved Problems, two of which now address the ipad. Price Discrimination. Chapter 12 is completely reorganized and rewritten, particularly the group discrimination section and the expanded nonlinear pricing section. It has a new Challenge. Oligopoly. Chapter 13 is reorganized. Revised sections include cartel, antitrust laws, mergers, Cournot differentiated products, and Bertrand vs. Cournot. Game Theory. Chapter 14 removes the discussion of iterative dominance (relying on dominant strategy and best-response approaches), divides the treatment of dynamic games into sections on repeated and sequential games, expands the repeated game material, and adds a new behavioral game theory section. Uncertainty. Chapter 17 s major revision includes new section heads and significant revisions to the sections on probability, attitudes toward risk, and behavioral economics. The material on uncertainty and discounting is now on MyEconLab. Externalities. Chapter 18 updates the pollution data, has a new subsection on the benefits versus costs from controlling pollution, and a new Solved Problem. Asymmetric Information. Chapter 19 is extensively revised and reorganized, with new material on insurance markets and a rewritten section on reducing adverse selection. Chapter 20 is fundamentally rewritten and has four new Solved Problems. The first half of the chapter is entirely new. Changes from the Seventh to the Eight Edition For the eight edition, I moderately or substantially revised and updated each chapter and added a new feature: Common Confusions. Some of the major changes in the presentation of theories in the chapters include: Supply and Demand. Chapters 2 and 3 are substantially rewritten. They illustrate the basic theory using empirical estimates from the avocados, coffee, corn, ethanol, and oil markets. The major coffee example is new to this edition. Three Solved Problems are significantly revised. 4

5 Consumer Theory. Chapters 4 and 5 are reorganized and significantly revised, particularly the section Cost-of-Living-Adjustments in Chapter 5. Production. Chapter 6 has a substantially modified section, Production, and light revisions elsewhere. Costs. Chapter 7 is moderately revised, particularly the material associated with Figure 7.2. Competition. Chapter 8 is substantially revised, particularly the beginning of the Two Steps to Maximizing Profit section, the discussion of the shutdown decision, the Competition in the Short Run section, the section on Entry and Exit, and the section Long-Run Market Supply When Input Prices Vary with Output, as several figures. Chapter 9 is substantially rewritten, particularly the introduction, the section on Policies that Shift Supply Curves, the discussion of oil trade, which uses a new estimated model. In this chapter and following chapters, deadweight loss is expressed as a negative number consistently. General Equilibrium and Welfare. Chapter 10 has a new Solved Problem, and the comparison of Pareto superiority and the material on Efficiency and Equity are rewritten. Monopoly. Chapter 11 has two new Solved Problems and all the material on Apple is revised. Price Discrimination. Chapter 12 is moderately revised throughout, the group discrimination material is reorganized and significantly revised, the two-part pricing material is lightly revised, and it contains a new Solved Problem. Oligopoly. Chapter 13 is significantly revised. The section Cartels is reorganized and rewritten. The sections Cournot Oligopoly and Comparison of Competitive, Stackelberg, Cournot, and Collusive Equilibria are rewritten. Game Theory. Chapter 14 has two new Solved Problems. The static game section is completely reorganized and rewritten. The dynamic game section is significantly revised. The chapter has a new discussion of double auctions. Factor Markets. Chapter 15 has a modified Table 15.1, Figures 15.9 and 15.10, and a discussion of monopsony. Capital and Interest Rates: Chapter 16 has two rewritten Solved Problems and updating of many facts. Uncertainty. Chapter 17 has a rewritten discussion of framing, a significantly modified Solved Problem, a new introduction to the section on Reducing Risk, and a new subsection Just Say No Externalities. Chapter 18 has substantially revised sections on the Coase Theorem, club goods, and public goods. Asymmetric Information. Chapter 19 is moderately rewritten and has a substantially revised Solved Problem. Chapter 20 has a new Challenge Solution. 5

6 One Final Note I cdnuolt blveiee taht I cluod aulaclty uesdnatnrd waht I was rdgnieg. The phaonmneal pweor of the hmuan mnid: Aoccdrnig to rscheearch at Cmabrigde Uinervtisy, it deosn't mttaer in waht oredr the ltteers in a wrod are, the olny iprmoatnt tihng is taht the first and lsat ltteer be in the rghit pclae. The rset can be a taotl mses and you can sitll raed it wouthit a porbelm. This is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. Amzanig huh? Taht siad, I dnot thnik taht redaing the frist and lsat chpaetrs olny wlil wrok. Yuo'll msis the jkoes. 6