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:

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:

Freakonomics by Steven Levitt

What to spend your economic stimulus handout on

STIMULUS HANDOUTS
In Australia, the government is giving a range of taxpayers a small sum of money to help stimulate the economy. As far as I know, many other countries may do the same thing. So if you have received (or will receive) some money, you are probably wondering what to spend it on. There are smart things you can spend it on and there are dumb things to spend it on. Being a book review blog I’m sure you can guess what I suggest you spend your money on…

That’s right, educational books. Now don’t go running away now, let me explain why!

I majored in Finance at university so I am always focusing on the best ways to improve my personal financial situation. As a finance graduate, I strongly recommend you spend a little bit of your handout money on personal finance books. Even one book will help you out greatly. I suggest this because if you start improving your financial education now, by the time the next recession begins you will not be in a delicate situation and suffer like countless people are now. So I whole heartedly recommend spending (some of) this ‘stimulus’ money to improve your personal financial situation now and for the future. A new HDTV may be extremely tempting, but in ten years it will be obsolete junk. The knowledge you can gain from reading up on personal finance will improve your entire future.

HOW CAN A PERSONAL FINANCE BOOK HELP YOU?
If you find yourself in a situation where bills keep piling up and you find it hard to get ahead financially despite having a decent paying job, it may be due to a lack of financial education. Don’t be put off by hearing that, the majority of the population don’t even understand the basics of money. That’s why so many people see financial planners – so somebody else can ‘fix’ their problems. The truth is that it is a lot easier and cheaper to learn how to fix your own financial problems on your own. By understanding why the way you spend your money is not helping you, you can learn and stop doing it in the future. Compare that to paying a financial planner to tell you the same things a book can tell you. The bottom line: just reading one personal finance book can teach you to improve your situation now and in the future.

WHAT TO SPEND THE REST OF THE MONEY ON?
If you buy a couple personal finance books and read through them, you should have a good idea what to spend the rest of your handout money on. If you read the right books, you should hopefully realise that buying a new TV or some other gadget may be fun in the short term, but won’t put you in a better position in the future. That TV will depreciate so fast it will be worthless before you know it. So what should you spend the money on? That’s why I suggest buying personal finance books, to be able to answer this question on your own! I could go into a very lengthy article on investments, but learning from a reliable investment book is better than any article I could write. So go buy a couple personal finance books and investment books to learn how you should properly spend your money. If you do so, I strongly believe that in ten years time you will be glad you did.

WHICH BOOK SHOULD I GET?
I will be reviewing personal finance books as I read them so check back here often to see what books can help you out. But if you want to find a book on your own type in ‘personal finance’ in the Amazon search box to the right. Many of the personal finance books will teach the same thing so just make sure the book you choose has been given a decent rating. To see what investment/wealth books I have already reviewed, click on ‘list of book reviews’ at the top of the page.

Book review: Freakonomics by Steven Levitt and Stephen Dubner

Freakonomics: A rogue economist explores the hidden side of everything – Steven Levitt and Stephen Dubner

Synopsis:
Freakonomics sees an economist looking at some unusual questions and attempting to find answers. The focus is on ‘conventional wisdom’ and how people assume such wisdom to be correct without any proof. The author explains why conventional wisdom is often wrong and how the experts will bend the facts to support their own interests. Topics include cheating schoolteachers and sumo-wrestlers, self serving real estate agents, poor drug dealers and criminals and obsessive parents. The author uses economic analysis to give light to why conventional wisdom often lacks any wisdom at all.

What I gained from reading this book:
Being an economics graduate, I thoroughly enjoyed this book. My economics lecturer always tried to explain why economics could be used to explain questions like the ones in this book but most students couldn’t understand what he meant. After reading this book I now wonder how much of the ‘conventional wisdom’ we come across actually have any truth in them. I really enjoyed reading why real estate agents don’t have the incentive to ‘get every last dollar for your house’ like they claim to do or why school teachers would cheat on students’ tests. I feel I really gained by learning to question what most people assume to be right.
I really wish that this book was on the ‘reading list’ during my university study because it would have helped so many students understand the value of economics and its way of thinking.

Positives:
Looks at very interesting and bizarre situations and questions. Can help you open your mind to thinking outside of the conventional wisdom that so many people assume is fact.
This book can help out economics students by showing them the side of economics they probably haven’t been learning in lecturers. There are no formulas here, only explanations.

Negatives:
Some of the statements in this book may offend or shock some people. Some topics are very close to many peoples’ hearts such as abortion, racial discrimination or parenting. If you read this book with an open mind you can at least understand the points the author is making. If on the other hand you shun everything the author says on those controversial topics, you will finish the book with no gain.
For those who know little or nothing about economics, you may dislike the author’s reasoning. As the author says ‘if morality represents an ideal world, then economics represents the actual world’. Sometimes the ‘actual world’ answers are not what we want to hear.


Recommended for: Those interested in economics
I highly recommend this book for all economics students. I have noticed that many of the students I talked to that failed or had low marks didn’t understand the way of thinking that this book uses. If you find economics hard, it may be because you have trouble understanding the mindset required. This book can help you in that regard.
For those not studying economics, it may still be interesting because of the unusual topics.

Genre: Economics

Overall rating: 8 of 10 stars

Australians can buy the book by clicking the picture below:

Book review: MBA in a day by Steven Stralser

MBA in a day: What you would learn at top-tier business schools (if you only had the time!) –Steven Stralser

Synopsis:
This book can be thought of as a summary of the concepts and principles that are taught to students studying an MBA. The book is split into four sections that represent four areas of business. Each chapter deals with a specific topic such as accounting or marketing or ethics. Each chapter contains a summary and list of references used (which can be useful if more information is needed on the topic). The use of dot-points and real world examples makes the book very concise while dealing with a great range of topics.

What I gained from reading this book:
I have studied Bachelor of Commerce in Australia and I like to think of this book as a summary of the entire course I took. Although it obviously doesn’t go into the detail the course did, it did cover all aspects. I read this book after graduating and was constantly reminded of all the theories and principles I had forgotten. I compared my textbooks to the topics explained and this book does a fantastic job of glancing over all the essential principles and theories. Although I didn’t necessarily learn anything new from this book (three years of study taught me the topics in detail), my knowledge was given a much needed ‘refresh’.

Positives:
Actually does a great job at explaining all the fundamental theories and principles that are taught in business schools.
The book is very concise and accurate which is definitely needed for such broad topics. The layout makes it easy to understand what area of business is being discussed.

Negatives:
Those expecting this book to go into detail on each topic will be disappointed. Obviously a book under 500 pages won’t teach you everything a business school would. If you don’t start with unrealistic expectations, you should be very happy by the end. I was surprised of the range of topics that were sufficiently discussed. Considering I have books over 1,000 pages on each topic, this book does a fantastic job of outlining the important points. Think of this book as a summary of what you would learn instead of trying to teach you everything an MBA course would.

Recommended for: Anybody wanting to gain a business understanding
Anybody with this interest can read this book. I recommend it for those looking to learn about business but unsure of how to start. By reading this book you will be given an overview of all the topics. From there you can go and find books specifically on the topics you want to learn in more detail.

Genre: Business

Overall rating: 8 of 10 stars

Australians can buy the book by clicking the picture below