For courses in the principles of economics. Throughout Economics, 3rd Edition, authors Daron Acemoglu, David Laibson, and John List use real economic questions and data to help you learn about the world around you. Taking a fresh approach, they use the themes of optimisation, equilibrium, and empiricism to not only illustrate the power of simple economic ideas, but also to explain and predict what’s happening in today’s society. Each chapter begins with an empirical question that is relevant to the life of the reader, and is later answered using data in the Evidence-Based Economics feature. As a result of the text’s practical emphasis, you learn to apply economic principles to guide the decisions you make in your own daily life.

FeaturesThree unified principles lay the groundwork for understanding the economic way of thinking about the world

Optimisation. Economists believe that optimisation explains most choices people make. When people fail to choose the best available option, economic reasoning can be used to analyse the mistake and to suggest a better course of action.
Equilibrium. Economic systems tend toward equilibrium, wherein each economic actor feels that he or she cannot do any better by picking another course of action. This principle highlights the connections among economic actors and their choices. Empiricism. Economists use data to test economic theories, learn about the world, and speak to policy-makers. The emphasis on matching theories with real-world data to answer specific questions helps to show students the evidence behind the theory, making economics concrete, interesting, and fun.

New to this edition

End-of-chapter Evidence-Based Economic problems show how economists use data to answer the question posed in the opening paragraph of each chapter. These features let students get a real look at economics as it plays out in the world around them and gives them the skills to question systematically and evaluate what they read. Evidence-Based Economics sections devote more discussion to real-world economic issues and events Letting the Data Speak boxes are short, targeted explorations that analyse an economic question by using real data as the foundation of the discussion. Choice and Consequence exercises emphasise optimisation by focusing on making the best decision. These features ask students to make an economic decision, or evaluate the consequences of past real decisions. The authors then explain how an economist might analyse the same decision. New questions discuss the Coronavirus vaccination, the future implications of AI on employment (Chapter 23) and recent changes in U.S. trade policy and Brexit (Chapter 28). Practical coverage of micro- and macroeconomics helps students see how they can apply course content in their own decision-making. New and relevant discussions related to the COVID-19. An integrated approach to consumption and production. Chapters 5 and 6 show students that consumption and production are really two sides of the same coin, glued together by the idea of incentives. Upon grasping the commonalities and linkages between the processes of consumer and producer decisions, students can see and get a better understanding of the whole picture and how these concepts tie together. In-depth coverage of game theory that yields powerful insights. Chapter 13 is devoted entirely to game theory, which is a source of some very powerful economic insights. This chapter emphasises that it helps us better understand the world when we place ourselves in the shoes of someone else. In so doing, each student may develop a deeper understanding of how to choose a strategy that is a best response to the strategies of others. An innovative suite that extends the microeconomic toolbox. Chapters 15 to 17 help students see the relevance of the study of microeconomics, which is applicable to real-life topics such as how compound interest causes an investment’s value to grow over time. And the book comes to a close in an innovative fashion with Chapter 18 on social economics. Exploring the economics of charity, fairness, and revenge, this final chapter drives home the fact that economic principles can be extended to every corner of our world.