Plan of the Book

This book is designed to introduce you to the basic ideas of microeconomics. Throughout, the focus stays on the behaviour of the individual consumers and producers of a single commodity, and on how the price and the quantity of that commodity are determined in its own market.

The book then builds this picture chapter by chapter:

• Chapter 2 studies the consumer's behaviour — how a consumer decides what and how much to buy.
• Chapter 3 introduces the basic ideas of production and cost.
• Chapter 4 turns to the producer's behaviour — how a firm decides what and how much to produce.
• Chapter 5 brings the two sides together to show how price and quantity are determined in a perfectly competitive market for a commodity. …