Tuesday, June 23, 2009

Book review: Microeconomic theory (Concepts and connections) by Michael Wetzstein

Microeconomic theory: concepts and connections – Michael Wetzstein

Synopsis:
This book explains the principles of microeconomic theory. Starting from the basics in consumer preference and utility maximisation, it progressively covers more complicated topics all the way up to asymmetric information and externalities. Each chapter is ‘mapped’ out so you can see how the concepts connect to each other (hence the title). There are plenty of diagrams to graphically explain the concepts and there are plenty of tables and equations. The examples are very useful to see how the concepts are applied to situations.
Real life questions are asked throughout the chapters to show the connection between the theoretical concepts and real world use. The ‘application’ boxes provide insight to issues seen in the real world and use the concepts to explain how these issues are dealt with. For example: an application box explaining the minimum wage explains if you should be for it or oppose it.

What I gained from reading this book:
I think the best aspect in this book is the real life questions it answers. So many people don’t realise the potential use economics has in their daily life decisions. Each chapter answers specific important questions such as ‘How do we decrease our dependence on foreign oil?’, ‘Is allowing the poor to have affordable housing desirable?’, ‘Why have equal opportunity legislation?’, ‘Should you always play the lottery?’. The answers to these questions are very insightful and revealing. In addition to reading the answers, I learned how to answer similar questions on my own using economics. As you can see, economics is useful in a wide range of topics. The number one gain I made from this book was the ability to question everything I hear or see and find answers.

Positives:
Well set out and provides useful examples and studies. Provides a good connection between the concepts and real world application. A wide range of topics are dealt with in detail.

Negatives:
The book uses a lot of equations and mathematics to explain the concepts. If you don’t like maths, you won’t enjoy these explanations. Of course the book also explains the concepts through words and diagrams, so it isn’t just math.

Recommended for: People interested in economics
I recommend this book for people wanting to learn economics. Because it starts from the very basics and covers a wide range of topics, it is a good choice. On the other hand, people who always question the Government’s policies will benefit from studying economics because it will give you a good understanding of why those policies were created. Economics provides a way to analyse the choices we make and helps us better understand those choices.
Genre: Economics

Overall rating: 6 out of 10 stars

Australians can buy the book by clicking the picture below:
Microeconomic Theory: Concepts and Connections

Where to from here:
If you decide you don’t want an in-depth book on economics and prefer to learn a general understanding of business as a whole, I recommend the following book:
MBA in a day by Steven Stralser
Alternatively, to read another book on economics, I recommend:

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