✅ Complete Solutions Manual with Instructor Manuals
Complete Instructor Manuals - Page 1 to 288 ✅
Complete Solutions Manuals - Page 289 1 to 399
, by Tony Lima, California State University, East Bay, Hayward, CA
CHAPTER OUTLINE AND LEARNING OBJECTIVES
Why Study Economics? p. 2
Identify three key reasons to study economics. Think of an example from your life in which
understanding opportunity costs or the principle of efficient markets could make a difference in your
decision making.
The Scope of Economics p. 5
Describe microeconomics, macroeconomics, and the diverse fields of economics.
The Method of Economics p. 8
Think about an example of bad causal inference leading to erroneous decision making. Identify the four
main goals of economic policy.
An Invitation p. 12
Begin to get a sense of the many ways economics touches one’s life.
Economic Skills and Economics as a Career p. 12
Describe economics as a career and the key skills you can learn from studying economics.
Appendix: How to Read and Understand Graphs p. 15
Understand how data can be graphically represented.
Copyright © 2026 1
,2 Principles of Macroeconomics
DETAILED CHAPTER OUTLINE
I. Introduction, page 1
The authors show students how economics relates to their everyday lives. Case, Fair, and Oster
discuss the interactions between the United States and other countries, while also comparing the
United States to other countries. Along the way macroeconomics is introduced with the notions of
employment, production, and GDP (although the authors don’t use that term). Foreign trade is also
mentioned at the level of U.S. exports and imports. The section concludes with a definition of
economics that emphasizes the two fundamental economic problems: scarcity and choice.
Economics is the study of how individuals and societies choose to use the scarce resources that
nature and previous generations have provided.
TEACHING TIP: The opening sentence, “The study of economics should begin with a sense of wonder,” is
very true. Mention to your class that some people actually make a living teaching economics. Developed
economies are truly highly specialized.
Unique Economics in Practice
Use the opening example on pages 1 and 2 to introduce the subject of globalization. Ask your
students what “made in the United States” means. Many will respond that the good has to be
manufactured in the United States. Raise the issue of where the parts were made. Quite a few goods
that carry the “made in the United States” label are actually assembled in the United States with
the components manufactured in other countries. Then move on to a discussion of what it would
mean for the United States or any developed economy to consume only what we make. The general
answer is higher prices and less choice for consumers, but try to get the students to focus on specific
goods (bananas and BMWs are two that are easy to understand). If you’re ambitious, you can
introduce value added as a percentage of market value to measure the extent of local contribution
to a final product.
Question: Apple’s iPhones are assembled by Foxconn Industries in China. But the various parts
come from many different countries. Should the iPhone be labeled “Made in China?” Shouldn’t
those other countries get some of the credit?
Suggested answer: This is stamped or printed on every iPhone: “Designed by Apple in California.
Assembled in China.” That’s about as clear as you can get. You might mention to your class that
complicated “rules of origin” are part of international trade agreements. These rules specify the
conditions under which a product can be labeled “Made in the United States” (for example). One
common rule is a minimum percentage of value added must be in the country in which origin is
claimed.
TEACHING TIP: Each chapter of the book includes a feature entitled Economics in Practice that helps students
apply the concepts of the chapter to a real-world observation or news story. Each chapter of this Instructor’s
Manual may include one or more Unique Economics in Practice to use in class.
Copyright © 2026
, Chapter 1: The Scope and Method of Economics 3
TEACHING TIP: To help break first-day tensions, try getting your students involved from the start. Ask them
why they are taking the course. Be persuasive—this is a good chance to show the class that you’re really a nice
person. You will get a variety of answers, from the serious—“To understand the world,” “To help me get a
good job when I graduate,” “I’m thinking about becoming an economics major”—to the humorous—“My
father made me,” “Intro Politics was full.” Some of these answers can prompt further questions: Why might
learning economics help you get a job? Why do you think your father wanted you to take this course? The
answers can help acquaint the rest of the class with the breadth and practicality of economics.
TEACHING TIP: Try to get the class thinking in terms of substitutes. Ask them to think about substitutes for
water. Most will say there are no substitutes for water. A few will say beer or wine, but point out that these
start as water so they don’t count. Things that can be used in place of water include plastic bottles of water
placed in a toilet tank (reduces volume per flush); shorter showers; and brown lawns. Then point out that if
there are substitutes for something as basic as water there almost certainly are substitutes for just about every
other economic good. Wants exceed quantity available for any economic good. You might want to mention the
2012–2016 California drought in this context. Californians managed to reduce water consumption by 27
percent. But water deliveries to farmers have been cut. What impact will that have on, say, the price
of lettuce?
II. Why Study Economics? pages 2–5
Learning Objective: Identify three key reasons to study economics. Think of an example from your
life in which understanding opportunity costs or the principle of efficient markets could make a
difference in your decision making.
There are three main reasons to study economics:
A. To Learn a Way of Thinking. Also described as a way to make decisions, the economic
way of thinking involves understanding three fundamental concepts.
TEACHING TIP: Point out to students that economists use common everyday words to describe very specific
ideas. The word cost is one example. How is the word used in everyday usage? One example is the common
conflation of cost and price. Economists use the word to mean opportunity cost, the cost of choosing one
alternative over another. Another example is efficiency. People generally use efficiency to describe any process
that’s accomplished with skill and dexterity. Economists mean producing the most output possible from given
quantities of resources (productive efficiency). A related concept, allocative efficiency is probably too advanced
for the first day (or week) of your class.
1. Opportunity Cost is the best alternative that we forgo, or give up, when we make
a choice or a decision. Every decision means giving up something.
a. Economists are fond of trade-offs as a way of thinking about decision
making. Taking one action usually means giving up something else. As
the text states, “The full ‘cost’ of making a specific choice includes [the
value of] what we give up by not making the best alternative choice.”
b. Opportunity costs arise because resources are scarce. Scarce means
limited. Resources are scarce because human wants exceed what we can
produce from our current resources.
TEACHING TIP: This example will be familiar to many faculty. Suppose your professional organization is
holding the annual meeting in Honolulu. You are fortunate enough to be selected to attend. After considering
alternatives, you decide to take a week’s vacation on Maui after the conference. You did this because you
realized the marginal cost of travelling to Maui from Honolulu is relatively small. People often use marginal
analysis without realizing what they are doing!
Copyright © 2026
Complete Instructor Manuals - Page 1 to 288 ✅
Complete Solutions Manuals - Page 289 1 to 399
, by Tony Lima, California State University, East Bay, Hayward, CA
CHAPTER OUTLINE AND LEARNING OBJECTIVES
Why Study Economics? p. 2
Identify three key reasons to study economics. Think of an example from your life in which
understanding opportunity costs or the principle of efficient markets could make a difference in your
decision making.
The Scope of Economics p. 5
Describe microeconomics, macroeconomics, and the diverse fields of economics.
The Method of Economics p. 8
Think about an example of bad causal inference leading to erroneous decision making. Identify the four
main goals of economic policy.
An Invitation p. 12
Begin to get a sense of the many ways economics touches one’s life.
Economic Skills and Economics as a Career p. 12
Describe economics as a career and the key skills you can learn from studying economics.
Appendix: How to Read and Understand Graphs p. 15
Understand how data can be graphically represented.
Copyright © 2026 1
,2 Principles of Macroeconomics
DETAILED CHAPTER OUTLINE
I. Introduction, page 1
The authors show students how economics relates to their everyday lives. Case, Fair, and Oster
discuss the interactions between the United States and other countries, while also comparing the
United States to other countries. Along the way macroeconomics is introduced with the notions of
employment, production, and GDP (although the authors don’t use that term). Foreign trade is also
mentioned at the level of U.S. exports and imports. The section concludes with a definition of
economics that emphasizes the two fundamental economic problems: scarcity and choice.
Economics is the study of how individuals and societies choose to use the scarce resources that
nature and previous generations have provided.
TEACHING TIP: The opening sentence, “The study of economics should begin with a sense of wonder,” is
very true. Mention to your class that some people actually make a living teaching economics. Developed
economies are truly highly specialized.
Unique Economics in Practice
Use the opening example on pages 1 and 2 to introduce the subject of globalization. Ask your
students what “made in the United States” means. Many will respond that the good has to be
manufactured in the United States. Raise the issue of where the parts were made. Quite a few goods
that carry the “made in the United States” label are actually assembled in the United States with
the components manufactured in other countries. Then move on to a discussion of what it would
mean for the United States or any developed economy to consume only what we make. The general
answer is higher prices and less choice for consumers, but try to get the students to focus on specific
goods (bananas and BMWs are two that are easy to understand). If you’re ambitious, you can
introduce value added as a percentage of market value to measure the extent of local contribution
to a final product.
Question: Apple’s iPhones are assembled by Foxconn Industries in China. But the various parts
come from many different countries. Should the iPhone be labeled “Made in China?” Shouldn’t
those other countries get some of the credit?
Suggested answer: This is stamped or printed on every iPhone: “Designed by Apple in California.
Assembled in China.” That’s about as clear as you can get. You might mention to your class that
complicated “rules of origin” are part of international trade agreements. These rules specify the
conditions under which a product can be labeled “Made in the United States” (for example). One
common rule is a minimum percentage of value added must be in the country in which origin is
claimed.
TEACHING TIP: Each chapter of the book includes a feature entitled Economics in Practice that helps students
apply the concepts of the chapter to a real-world observation or news story. Each chapter of this Instructor’s
Manual may include one or more Unique Economics in Practice to use in class.
Copyright © 2026
, Chapter 1: The Scope and Method of Economics 3
TEACHING TIP: To help break first-day tensions, try getting your students involved from the start. Ask them
why they are taking the course. Be persuasive—this is a good chance to show the class that you’re really a nice
person. You will get a variety of answers, from the serious—“To understand the world,” “To help me get a
good job when I graduate,” “I’m thinking about becoming an economics major”—to the humorous—“My
father made me,” “Intro Politics was full.” Some of these answers can prompt further questions: Why might
learning economics help you get a job? Why do you think your father wanted you to take this course? The
answers can help acquaint the rest of the class with the breadth and practicality of economics.
TEACHING TIP: Try to get the class thinking in terms of substitutes. Ask them to think about substitutes for
water. Most will say there are no substitutes for water. A few will say beer or wine, but point out that these
start as water so they don’t count. Things that can be used in place of water include plastic bottles of water
placed in a toilet tank (reduces volume per flush); shorter showers; and brown lawns. Then point out that if
there are substitutes for something as basic as water there almost certainly are substitutes for just about every
other economic good. Wants exceed quantity available for any economic good. You might want to mention the
2012–2016 California drought in this context. Californians managed to reduce water consumption by 27
percent. But water deliveries to farmers have been cut. What impact will that have on, say, the price
of lettuce?
II. Why Study Economics? pages 2–5
Learning Objective: Identify three key reasons to study economics. Think of an example from your
life in which understanding opportunity costs or the principle of efficient markets could make a
difference in your decision making.
There are three main reasons to study economics:
A. To Learn a Way of Thinking. Also described as a way to make decisions, the economic
way of thinking involves understanding three fundamental concepts.
TEACHING TIP: Point out to students that economists use common everyday words to describe very specific
ideas. The word cost is one example. How is the word used in everyday usage? One example is the common
conflation of cost and price. Economists use the word to mean opportunity cost, the cost of choosing one
alternative over another. Another example is efficiency. People generally use efficiency to describe any process
that’s accomplished with skill and dexterity. Economists mean producing the most output possible from given
quantities of resources (productive efficiency). A related concept, allocative efficiency is probably too advanced
for the first day (or week) of your class.
1. Opportunity Cost is the best alternative that we forgo, or give up, when we make
a choice or a decision. Every decision means giving up something.
a. Economists are fond of trade-offs as a way of thinking about decision
making. Taking one action usually means giving up something else. As
the text states, “The full ‘cost’ of making a specific choice includes [the
value of] what we give up by not making the best alternative choice.”
b. Opportunity costs arise because resources are scarce. Scarce means
limited. Resources are scarce because human wants exceed what we can
produce from our current resources.
TEACHING TIP: This example will be familiar to many faculty. Suppose your professional organization is
holding the annual meeting in Honolulu. You are fortunate enough to be selected to attend. After considering
alternatives, you decide to take a week’s vacation on Maui after the conference. You did this because you
realized the marginal cost of travelling to Maui from Honolulu is relatively small. People often use marginal
analysis without realizing what they are doing!
Copyright © 2026
