,Instructor Manual
Mankiw, Principles of Economics, 11e, 2027, 9798214050348;
Chapter 1: Ten Principles of Economics
Prepared by David R. Hakes, University of Northern Iowa
TABLE OF CONTENTS
Purpose and Perspective of the Chapter .................................................................................. 2
Chapter Objectives ........................................................................................................................ 2
Complete List of Chapter Activities and Assessments ............................................................ 3
Key Terms....................................................................................................................................... 3
What’s New in This Chapter ........................................................................................................ 4
Chapter Outline ............................................................................................................................. 4
Solutions to Text Problems .......................................................................................................11
Questions for Review ................................................................................. 11
Problems and Applications ......................................................................... 12
Additional Activities and Assignments .....................................................................................15
Additional Resources ...................................................................................................................16
Cengage Video Resources ............................................................................ 16
,PURPOSE AND PERSPECTIVE OF THE CHAPTER
Chapter 1 is the first chapter in a three-chapter section that serves as the
introduction to the text. Chapter 1 introduces ten fundamental principles on which
the study of economics is based. In a broad sense, the rest of the text is an
elaboration on these ten principles. Chapter 2 will develop how economists approach
problems, while Chapter 3 will explain how individuals and countries gain from trade.
The purpose of Chapter 1 is to lay out ten economic principles that will serve as
building blocks for the rest of the text. The ten principles can be grouped into three
categories: how people make decisions, how people interact, and how the economy
works as a whole. Throughout the text, references will be made repeatedly to these
ten principles.
Key points addressed in this chapter:
• The basic lessons about individual decision making are that people face trade-
offs among alternative goals, that the cost of any action is measured in terms
of forgone opportunities, that rational people make decisions by comparing
marginal costs and marginal benefits, and that people change their behavior in
response to the incentives they face.
• The basic lessons about economic interactions among people are that trade
and interdependence can be mutually beneficial, that markets are usually a
good way of coordinating economic activity, and that the government can
potentially improve market outcomes by remedying a market failure or by
promoting greater economic equality.
• The basic lessons about the economy as a whole are that living standards are
primarily determined by productivity, that high or persistent inflation is
primarily determined by growth in the quantity of money, and that society
faces a short-run trade-off between inflation and unemployment.
CHAPTER OBJECTIVES
The following objectives are addressed in this chapter:
• Explain how scarcity influences decisions.
• Explain how individuals evaluate opportunity costs to make decisions.
• Explain how marginal analysis influences decision making.
• Apply basic economic principles of individual decision making that determine
how an economy generally works.
• Explain how the terms of trade can lead to gains.
• Given a scenario, identify the distribution system being used.
[return to top]
, COMPLETE LIST OF CHAPTER ACTIVITIES AND ASSESSMENTS
The following table organizes activities and assessments so you can make decisions
about which content you would like to emphasize in your class. For additional
guidance, refer to the Teaching Online Guide.
Activity/Assessment Source (i.e., PPT slide, Duration
Workbook)
Active Learning 1 PPT Slide 12 5 mins.
Active Learning 2 PPT Slide 17 5 mins.
Active Learning 3 PPT Slide 27 20–25 mins.
Think-Pair-Share Activity PPT Slide 34 5–10 mins.
Section 01-1 QuickQuiz MindTap eBook 5 mins.
Section 01-2 QuickQuiz MindTap eBook 5 mins.
Section 01-3 QuickQuiz MindTap eBook 5 mins.
ConceptClip: Efficiency MindTap Learn It Folder 5 mins.
ConceptClip: Opportunity Cost MindTap Learn It Folder 5 mins.
ConceptClip: Externality MindTap Learn It Folder 5 mins.
Chapter 01 Problems & Applications MindTap Study It Folder 45–60 mins.
Chapter 01 A+ Test Prep MindTap Study It Folder N/A
Chapter 01 Homework MindTap Apply It Folder 30–45 mins.
Chapter 01 Data Exploration Activity: The MindTap Apply It Folder 20 mins.
Meaning of Scarcity in Economics
Chapter 01 Quiz: Ten Principles of MindTap Apply It Folder 20–30 mins.
Economics
[return to top]
KEY TERMS
Business Cycle: fluctuations in economic activity, such as employment and
production
Economics: the study of how society manages its scarce resources
Efficiency: the property of society getting the most it can from its scarce resources
Equality: the property of distributing economic prosperity uniformly among the
members of society
Externality: the impact of one person’s actions on the well-being of a bystander
Incentive: something that induces a person to act
Inflation: an increase in the overall level of prices in the economy
Mankiw, Principles of Economics, 11e, 2027, 9798214050348;
Chapter 1: Ten Principles of Economics
Prepared by David R. Hakes, University of Northern Iowa
TABLE OF CONTENTS
Purpose and Perspective of the Chapter .................................................................................. 2
Chapter Objectives ........................................................................................................................ 2
Complete List of Chapter Activities and Assessments ............................................................ 3
Key Terms....................................................................................................................................... 3
What’s New in This Chapter ........................................................................................................ 4
Chapter Outline ............................................................................................................................. 4
Solutions to Text Problems .......................................................................................................11
Questions for Review ................................................................................. 11
Problems and Applications ......................................................................... 12
Additional Activities and Assignments .....................................................................................15
Additional Resources ...................................................................................................................16
Cengage Video Resources ............................................................................ 16
,PURPOSE AND PERSPECTIVE OF THE CHAPTER
Chapter 1 is the first chapter in a three-chapter section that serves as the
introduction to the text. Chapter 1 introduces ten fundamental principles on which
the study of economics is based. In a broad sense, the rest of the text is an
elaboration on these ten principles. Chapter 2 will develop how economists approach
problems, while Chapter 3 will explain how individuals and countries gain from trade.
The purpose of Chapter 1 is to lay out ten economic principles that will serve as
building blocks for the rest of the text. The ten principles can be grouped into three
categories: how people make decisions, how people interact, and how the economy
works as a whole. Throughout the text, references will be made repeatedly to these
ten principles.
Key points addressed in this chapter:
• The basic lessons about individual decision making are that people face trade-
offs among alternative goals, that the cost of any action is measured in terms
of forgone opportunities, that rational people make decisions by comparing
marginal costs and marginal benefits, and that people change their behavior in
response to the incentives they face.
• The basic lessons about economic interactions among people are that trade
and interdependence can be mutually beneficial, that markets are usually a
good way of coordinating economic activity, and that the government can
potentially improve market outcomes by remedying a market failure or by
promoting greater economic equality.
• The basic lessons about the economy as a whole are that living standards are
primarily determined by productivity, that high or persistent inflation is
primarily determined by growth in the quantity of money, and that society
faces a short-run trade-off between inflation and unemployment.
CHAPTER OBJECTIVES
The following objectives are addressed in this chapter:
• Explain how scarcity influences decisions.
• Explain how individuals evaluate opportunity costs to make decisions.
• Explain how marginal analysis influences decision making.
• Apply basic economic principles of individual decision making that determine
how an economy generally works.
• Explain how the terms of trade can lead to gains.
• Given a scenario, identify the distribution system being used.
[return to top]
, COMPLETE LIST OF CHAPTER ACTIVITIES AND ASSESSMENTS
The following table organizes activities and assessments so you can make decisions
about which content you would like to emphasize in your class. For additional
guidance, refer to the Teaching Online Guide.
Activity/Assessment Source (i.e., PPT slide, Duration
Workbook)
Active Learning 1 PPT Slide 12 5 mins.
Active Learning 2 PPT Slide 17 5 mins.
Active Learning 3 PPT Slide 27 20–25 mins.
Think-Pair-Share Activity PPT Slide 34 5–10 mins.
Section 01-1 QuickQuiz MindTap eBook 5 mins.
Section 01-2 QuickQuiz MindTap eBook 5 mins.
Section 01-3 QuickQuiz MindTap eBook 5 mins.
ConceptClip: Efficiency MindTap Learn It Folder 5 mins.
ConceptClip: Opportunity Cost MindTap Learn It Folder 5 mins.
ConceptClip: Externality MindTap Learn It Folder 5 mins.
Chapter 01 Problems & Applications MindTap Study It Folder 45–60 mins.
Chapter 01 A+ Test Prep MindTap Study It Folder N/A
Chapter 01 Homework MindTap Apply It Folder 30–45 mins.
Chapter 01 Data Exploration Activity: The MindTap Apply It Folder 20 mins.
Meaning of Scarcity in Economics
Chapter 01 Quiz: Ten Principles of MindTap Apply It Folder 20–30 mins.
Economics
[return to top]
KEY TERMS
Business Cycle: fluctuations in economic activity, such as employment and
production
Economics: the study of how society manages its scarce resources
Efficiency: the property of society getting the most it can from its scarce resources
Equality: the property of distributing economic prosperity uniformly among the
members of society
Externality: the impact of one person’s actions on the well-being of a bystander
Incentive: something that induces a person to act
Inflation: an increase in the overall level of prices in the economy
