Cover: Krugman's Economics for the AP® Course, 4th Edition by David Anderson; Margaret Ray

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Krugman's Economics for the AP® Course

Fourth  Edition©2023  David Anderson; Margaret Ray

About

Reach the summit and succeed on the AP® Economics exams.
Krugman’s Economics for the AP® Course, 4th Edition provides all the support you need to succeed on the exams and master economics concepts. This textbook has been thoroughly revised to align with the Course Framework. AP® Economics skills are reinforced throughout and are amplified in the Teacher Resource program. 


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Table of Contents

Macroeconomics


UNIT 1 Basic Economic Concepts


1.1 Scarcity and Choice
1.2 Opportunity Cost and the Production Possibilities Curve Model
1.3 Comparative Advantage and Gains from Trade
1.4 Demand
1.5 Supply
1.6 Market Equilibrium, Disequilibrium, and Changes in Equilibrium


Unit 2 Economic Indicators and the Business Cycle


2.1 The Circular Flow and Gross Domestic Product
2.2 Limitations of Gross Domestic Product
2.3 Unemployment
2.4 Price Indices and Inflation
2.5 Costs of Inflation
2.6 Real Versus Nominal Gross Domestic Product
2.7 Business Cycles


Unit 3 National Income and Price Determination


3.1 Aggregate Demand
3.2 Multipliers
3.3 Short-Run Aggregate Supply
3.4 The Long-Run Aggregate Supply Curve
3.5 Equilibrium in the Aggregate Demand–Aggregate Supply Model
3.6 Short-Run Changes in the Aggregate Demand–Aggregate Supply Model
3.7 Long-Run Self Adjustment in the Aggregate Demand–Aggregate Supply Model
3.8 Fiscal Policy
3.9 Automatic Stabilizers


Unit 4 The Financial Sector

4.1 Financial Assets
4.2 Nominal Versus Real Interest Rates
4.3A Definition, Measurement, and Functions of Money
4.3B Central Banks and the Federal Reserve
4.4 Banking and the Expansion of the Money Supply
4.5 The Money Market
4.6 Monetary Policy
4.7 The Loanable Funds Market


Unit 5 Long-Run Consequences of Stabilization Policies

5.1 Fiscal and Monetary Policy Actions in the Short Run
5.2 The Phillips Curve
5.3 Money Growth and Inflation
5.4 Government Deficits and the National Debt
5.5 Crowding Out
5.6 Economic Growth
5.7 Public Policy and Economic Growth


Unit 6 International Trade and Finance


6.1 Balance of Payments Accounts
6.2 Exchange Rates
6.3 The Foreign Exchange Market
6.4 Changes in Policies, Economic Conditions, and the Foreign Exchange Market
6.5 The Foreign Exchange Market and Net Exports
6.6 Real Interest Rate and International Capital Flows
Appendix Putting it All Together


AP® Macroeconomics Exam
Practice Test


Macroeconomics  Enrichment Modules
A: Recession and Recovery During the Pandemic
B: Federal Reserve Monetary Policy in an Ample Reserve Regime

Microeconomics


UNIT 1 Basic Economic Concepts

1.1 Scarcity and Choice
1.2 Economic Systems
1.3 The Production Possibilities Curve
1.4 Comparative Advantage and Trade
1.5 Cost-Benefit Analysis
1.6 Consumer Choice


Unit 2 Supply and Demand

2.1 Demand
2.2 Supply
2.3 Price Elasticity of Demand
2.4 Price Elasticity of Supply
2.5 Income Elasticity and Cross-Price Elasticity
2.6 Consumer Surplus, Producer Surplus, and Market Equilibrium
2.7 Market Disequilibrium and Changing Market Conditions
2.8A Government Intervention: Taxes, Subsidies, and Markey Efficiency
2.8B Government Intervention: Price and Quantity Controls
2.9 International Trade and Public Policy


Unit 3 Production Costs, Profit, and Perfect Competition

3.1 The Production Function
3.2 Short-Run Production Costs
3.3 Long-Run Production Costs
3.4 Types of Profit
3.5 Profit Maximization
3.6 Firms’ Entry and Exit Decisions
3.7 Perfect Competition


Unit 4 Imperfect Competition

4.1 Introduction to Imperfect Competition
4.2 Monopoly
4.3 Price Discrimination
4.4 Monopolistic Competition
4.5 Oligopoly and Game Theory


Unit 5 Factor Markets

5.1 Introduction to Factor Markets
5.2 Changes in Factor Demand and Supply
5.3 Profit Maximization in Factor Markets
5.4 Monopsony


Unit 6 Market Failure and the Role of Government

6.1 Market Outcomes and Social Efficiency
6.2 Externalities
6.3 Public Goods
6.4 Government Policies
6.5 Income and Wealth Inequality
AP® Microeconomics Exam
Practice Test


Microeconomics Enrichment Modules
C: Behavioral Economics
D: The Economics of Information
E: Indifference Curves and Consumer Choice


AP® Economics Skills Appendix:
Graphs in Economics


Financial Literacy Handbook
Glossary/Glosario
Index

 

 

David Anderson

David Anderson is the Paul G. Blazer Professor of Economics at Centre College. He received his BA in economics from the University of Michigan and his MA and PhD in economics from Duke University. Anderson has been involved in the AP® Economics program since 1994. For five years he led the grading of one or both of the AP® Economics exams, and he speaks regularly at AP® conferences and workshops. He has authored dozens of scholarly articles and 15 books, including Survey of Economics, Explorations in Economics, Cracking the AP® Economics Exam, Economics by Example, Favorite Ways to Learn Economics, and Environmental Economics and Natural Resource Management. His research is primarily on economic education, environmental economics, law and economics, and labor economics. Anderson loves teaching introductory economics and has won awards for excellence and innovation in the classroom. His favorite hobby is running, and he competes in marathons and triathlons. His family resides in Danville, Kentucky.

Margaret Ray

Margaret Ray teaches economics at both the university and high school levels. She is an AP® Economics instructor for Johns Hopkins University’s Center for Talented Youth and is a member of the economics department faculty at Texas A&M University in College Station, Texas. She received her BS in economics from Oklahoma State University and her PhD in economics from the University of Tennessee. In 2012, she received her MEd in curriculum and instruction and became certified to teach K–12 social studies. She has taught AP® Economics at several high schools in Virginia and has received the Council on Economic Education’s Excellence in Teaching Economics award. She has been involved in the AP® Economics program since 1992, serving as a reader and question leader, writing test items, overseeing the AP® course audit, writing College Board® “Special Focus” articles, and editing the Council on Economic Education’s AP® Macroeconomics resource. She has been a College Board® Endorsed Consultant for economics since 2001, and she conducts several professional development workshops and institutes each year. Her favorite hobby is showing hunter-jumper horses adopted from bracehorse rescue organizations. She lives on a small farm in central Texas.