Microeconomics with Ethics

Microeconomics with Ethics is an introductory college-level textbook that will enable students to understand current controversies about how to best organize an economic system. The approach emphasizes economic model development and how to interpret their results. The textbook first introduces an Edgeworth box to explain the gains from trade and comparative advantage. We then introduce market complexity, stepwise, by introducing monopoly, oligopoly, and finally perfect competition with supply and demand. Government policy is analyzed under perfect competition and in the presence of market imperfections such as externalities, public goods and common resources. Students will learn why some economic models support limited government while others support a much larger role for government. The textbook diverges only slightly from traditional neoclassical textbooks by demonstrating why individual self-interest must be constrained by ethical behavior to achieve economically efficient outcomes. For example, the acceptance of theft, equivalent to a violation of property rights, may more readily satisfy someone’s self-interest, but would nonetheless undermine the development of markets involving mutually voluntary exchange. Other unethical behaviors examined include deceptive business practices, efforts to undermine free competition, the unwillingness to consider community well-being, and economic disloyalties. Lastly, the text highlights how both private institutions, such as religions, and public institutions, such as criminal justice systems, can constrain unethical behaviors and thereby promote economic efficiency. Students will come away from this course with a rich understanding of the modern economic system and a clearer perspective on the different opinions across the economic and political spectrum about how to best organize an economy.