About This Textbook and Foreword

ABOUT THE TEXTBOOK (click book cover to right to see samples)

The theme of this textbook is that economics is the study of choices that we have to make every day.  We have to make choices because of scarcity; that is unlimited wants and limited resources.   Throughout the textbook we focus on the fact these choices have costs, opportunity costs as we put it in economics.  The ideal way to make the best choice on how to use our scarce resources is to create a cost/benefit analysis model and make our choices based on what answer will bring us the most utility.

This, of course, is the traditional economic model for deciding the use of our scarce resources, and this textbook places great emphasis on this model.  The problem is that not all decisions can easily be boiled down to quantitative cost/benefit analysis.  For example, how valuable is the clean air that we breathe in dollars and cents, or the health and well-being of individuals and the society?  

This textbook balances the conservative “entirely market forces should make those decisions” approach put forth by such institutions as the Free Enterprise Institute (FEI) and the Foundation for Teaching Economics (FTE), and the more liberal approach that "the government should answer these tough questions" espoused by the likes of the Center on Budget and Policy Priorities (CBPP) and the Economic Policy Institute (EPI).  We lay out the arguments from all sides on these fundamental issues like the minimum wage and the role of government in the economy. 

The primary thesis of this textbook is that the market economy in the United States is a great success and that market forces have lead to most of that success, but there is a need for discussion of the proper role of the government in any economy, including ours.  This is especially true given the recent failure of the financial market. The final decision on the role of the government in our economy is up to the people and their elected officials; however, understanding the way our economy works and the strengths and weaknesses of each side of the argument is fundamental to American citizens making the best choices based on their own beliefs and values. 

FOREWORD

Economics is a fascinating field of study because it examines decisions you make every day, decisions that might have a profound effect on you. Which car should you buy?  Should you go to college?  Should you change jobs?  How do you make investments to protect your retirement?  Should your business expand by opening a branch in another city?   When should you hire another worker for your business?  Understanding these decisions and why you make them will not only give you insight into how the economy works but will help you become a better consumer and/or producer.  Of course, the problem with trying to answer some of these questions is that they are complex and have multiple variables for determining the best answer.

Economics isn’t always easy for every student to understand and comprehend partly because economics, like most of the social studies, isn’t always a hard science.  A hard science is one where we know 100% of the time that combining two variables leads to a definitive outcome.  For example, in a laboratory two parts of hydrogen and one part of oxygen is always water (H20).  In economics, we don’t operate in a laboratory and can’t control all the variables.  If we were to move outside the laboratory in Michigan’s winter, and combine those two parts of hydrogen and one part of oxygen outdoors, we would not have water, but ice.  Once we leave the laboratory, we can’t control all the variables, such as temperature, in our science model.  

The same is true with economics.   We build models that tell us that when faced with choices, people will make the choice that has the greatest advantage for them.  Of course, the problem is that people don’t always act rationally, or even act in self-interest, as most economists believe they do.  When the consumers and businesses don’t act rationally or in their own self-interest, the various concepts, principles and laws of economics don’t always produce “water,” if we may return to our hard science illustration.  For example, we can say that as the price of a good increases at one store and not another store, we will go to the second store to buy the same good for the lower price.  We always try to maximize our own self interest, in this case by finding the price that will allow us to part with the least amount of money, a scarce resource.

We all know, however, of instances where this assumption is not accurate.   Perhaps a customer doesn’t want to drive an extra mile to the cheaper store, or the salesclerk at the store with the higher price is friendlier.  Accounting for these many variables makes building a model difficult.  An in-depth study of economics will account for most of these variables, but adding so many qualifiers, like x is true if a, b, c, d and e are also true, makes it much more difficult for a beginner to understand economics. 

This textbook is written to give the high-school student a basic understanding of the fundamental economic concepts that generally hold true.  For instance, most people are profit-maximizing and act in their own self-interest.  Some conditions, including a blizzard in Michigan in January, might influence us to stop at the store next door and pay an extra dollar for the same loaf of bread we could get down the street.  This high-school textbook can’t account for all of the variables that go into advanced economics.  We will point out the obvious variables in our numerous models; for instance, one loaf of bread might not taste the same as another loaf, and this difference in taste will change the rule that consumers always buy the least-expensive product.   

Another note of importance: global economic concepts will be integrated throughout this textbook, not placed in a separate chapter.  The author believes that our economy is so integrated into the global economy we can’t separate global economic concepts and place them in a stand-alone chapter as if they are independent of the American economy.  Instead, when we learn about labor in the U.S, we will learn how free-trade and international competition impact workers and businesses in the U.S.  Choosing what concepts, principles and laws of economics to include in a basic textbook is a challenge. 

The goal of this textbook is to teach you, a high-school student, the basics of economics so you can become a functioning, informed participant in our economy.   Some of you might find economics interesting and want to continue your studies in advanced economics classes; others of you will learn enough in this textbook to satisfy your need to understand how our economy operates and what role you play.

The author gratefully acknowledges the excellent services of Jan Drolen in editing this textbook.  On a personal note, the author dedicates this textbook to the two people who had the greatest impact on his becoming a teacher and an author: his mother, Karen Christopher, and his first economics professor, Louis Junker, formerly of Western Michigan University.  The author honors his mother for her love and encouragement and Professor Junker for his inspiration and development of the author’s love of economics.

The High School Economics textbook and supplemental materials are copyright protected and Christopher Productions reserves all rights associated with the copyright.  Any unauthorized use, publication, distribution, redistribution, and/or violation of this copyrighted material is strictly prohibited under penalty of law. 

© 2013 Michigan Edition

ISBN 978-0-615-19021-1

Christopher Productions

7228 Bolingbrook Drive

Portage, Michigan  49024