Preface

This is the second edition of a book that was originally published in 2009 by Cambridge University Press. While the core of the book remains the same, this edition refreshes all of the screenshots based on Excel 2019 and updates the data used in real-world applications. It also fixes typos and mistakes. Finally, it includes a new chapter on rational addiction and offers several new optimization problem examples.

The preface of the first edition said:

In the competitive world of textbooks, different is definitely bad. Authors and publishers, like politicians, stay in the safe middle. Straying too far from the herd is almost a sure way to fail. Fear is strong, but it apparently can be overcome—after all, you are reading a spectacularly unconventional textbook.

The most obvious difference between this book and the usual fare is the use of Microsoft Excel to teach economic theory. This enables students to acquire a great deal of sophisticated, advanced Excel skills while learning economics. No other book does this.

The use of Excel drives other differences. Excel requires concrete, numerical problems instead of the abstract functions and graphs used by other books. Excel’s Solver makes possible presentation of numerical methods for solving optimization problems and equilibrium models. No other book does this.

Because numerical solutions are readily available, this book is able to present and explain analytical methods that have been pushed to appendixes or completely ignored in mainstream texts. Every problem is solved twice—once with Excel and once with equations, algebra, and, when needed, calculus. No other book does this.

Finally, this book is organized differently. It explicitly repeats a single central methodology, the economic approach, so students learn how economists think and how to think like an economist. Other books try to do this, but none brings the economic way of thinking explicitly to the surface, repeating the message in every application.

I wrote this book because I learned Visual Basic and quickly realized that enhancing a spreadsheet with macros made possible a whole new way of teaching economics. When my students loved this approach, I wanted to share it with others.

Because this book is so different, it will probably not challenge the top sellers. It will be the unusual professor who is willing to try something this new. It requires that the professor care enough about students and teaching to invest time and energy in mastering the material. Of course, I think the rate of return is quite high. My hope is that, though few in number, a committed, enthusiastic core of adopters will enable this book to survive.

Thank you for trying this unique entry into the competitive market for micro theory textbooks. I hope you find that the reward was worth the risk.

Well, after more than ten years, I can safely say that I certainly was right that the book would not challenge the top sellers! It strayed far from the herd and went largely unnoticed. When I asked Cambridge University Press to do a second edition, they politely declined.

But, I am not giving up. I believe that teaching economics via Excel is a winner. So, I am ignoring the market, producing my own second edition, and giving it away for free.

I am well aware that this edition will not attract many adopters and that I am engaged in a quixotic fight against foes who are not even aware of my presence. I remain baffled at how badly microeconomics is taught—it is as if computers were never invented. We can and must do better. I will keep this book alive in case someone wants to try a novel, innovative approach to teaching and learning microeconomics.

This edition assumes that many will read it electronically, although you are free to print it out and I am so old school that I certainly would prefer handwriting notes and underlining on paper. Any print shop can do this and, if anyone asks, explain that this is an open access book and you have legal right to print it. You can also print it online at sites such as www.lulu.com/.

I think Adobe Acrobat Reader is a good choice if you decide to read it on screen, but you are, of course, welcome to use your favorite eReader. Here is a list of 15 pdf readers: blog.hubspot.com/marketing/best-free-pdf-reader. One advantage of digital access is that links are highlighted for easy clicking. You should use your pdf reader’s commenting capabilities to highlight, search (ctrl-f), and take notes. It should also be easy to look up words you do not know or search for ideas that pique your interest so take full advantage of the electronic tools at your disposal.

I have been teaching economics for a long time now. I am positive that using Excel to learn how economists use models and see the world works for almost all students. You can learn a lot of economics, math, and Excel while working with this book. Do your best and good luck!

Humberto Barreto

hbarreto@depauw.edu

Greencastle, Indiana

June 12, 2020