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Part 1
Introduction
This section has four parts. First, a summary of the supplements and packages available for
instructors is included. Second, a discussion of the main features of PowerPoint and how to use it
in the classroom is provided. Third, an explanation of the main features of the testing package,
ExamView, is included. Fourth, some suggestions on how to use movies in the classroom are
included.
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SUPPLEMENTS
A full set of supplements accompanies the text. They include the following:
Aplia
Aplia™ is an online interactive learning solution that improves comprehension and outcomes by
increasing student effort and engagement. Founded by a professor to enhance his own courses, Aplia
provides automatically graded assignments that were written to make the most of the Web medium and
contain detailed, immediate explanations on every question. Aplia is available in more than 15
disciplines and has been used by more than 2 million students at more than 1800 institutions. Visit
http://www.aplia.com/economics/ for more details.
MindTap
MindTap is a fully online, highly personalized learning experience built on Cengage Learning
content. MindTap combines student learning tools—readings, multimedia, activities, and
assessments—into a singular Learning Path that guides students through their course. Instructors
personalize the experience by customizing authoritative Cengage Learning content and learning
tools, including the ability to add their own content in the Learning Path via apps that integrate
into the MindTap framework seamlessly with Learning Management Systems.
Write Experience
Write Experience is a technology product that allows you to assess written communication skills
without adding to your workload. Instructors in all areas have told us it’s important that students
can write effectively in order to communicate and think critically. Through an exclusive
partnership with a technology company, Cengage Learning’s Write Experience allows you to do
just that! This new product utilizes artificial intelligence to not only score student writing instantly
Economics CourseMate
CourseMate brings course concepts to life with interactive learning, study, and exam preparation
tools that support the printed textbook. Watch student comprehension soar as your class works
with the printed textbook and the text-specific Web site, Economics CourseMate goes beyond the
book to deliver what you need!
Part 1/Introduction ❖ 3
Engagement Tracker
How do you know your students have read the material or viewed the resources you’ve assigned?
How can you tell if your students are struggling with a concept? Engagement Tracker assesses
student preparation and engagement. Use the tracking tools to see progress for the class as a whole
or for individual students. Identify students at risk early in the course. Uncover which concepts are
most difficult for your class. Monitor time on task. Keep your students engaged.
Interactive Teaching and Learning Tools
Economics CourseMate includes interactive teaching and learning tools:
• Quizzes
• Flashcards
• Videos
• Graphing tutorials
• News, debates, and data
Interactive eBook
In addition to interactive teaching and learning tools, Economics CourseMate includes an
interactive eBook. Students can take notes, highlight, search and interact with embedded media
specifi c to their book. Use it as a supplement to the printed text, or as a substitute—the choice is
up to your students with CourseMate. Go to login .cengage.com to access these resources within
CourseMate.
WebTutorTM ToolBox for WebCT, Blackboard, and eCollege
WebTutor will allow you to jumpstart your course whether you want to simply Web enable your
class or put an entire course online. Using a WebTutor cartridge, it’s easy to add, edit, reorganize,
or delete content customized for Economics: Private and Public Choice. The content includes
media assets, quizzing, Web links, discussion topics, interactive games and exercises, and more.
To find out more about WebTutor, contact your local South-Western representative. (Other
platform choices are available on request.)
Test Banks
The test banks for the 15th edition were prepared by the author team with the assistance of Joe
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Cloud Based Test Banks (Cognero)
The cloud-based test banks for this edition have been enhanced significantly. Cognero contains all
of the questions in the test bank so you create and customize tests in minutes. You can easily edit
and import your own questions and graphics and edit and maneuver existing questions.
PowerPoint
We believe our PowerPoint presentation, prepared by Charles Skipton of the University of Tampa,
is the best you will find in the principles market. The presentation includes chapter-by-chapter
lecture notes with fully animated, hyperlinked slides of the textbook’s exhibits. Its dynamic
graphs and accompanying captions make it easy for instructors to present (and students to follow)
sequential changes. The graphs are also used to highlight various relationships among economic
variables. To facilitate classroom discussion and interaction, questions are strategically
interspersed throughout the PowerPoint slides to help students develop the economic way of
thinking. Instructions explaining how professors can easily add, delete, and modify slides in order
to tailor make the presentation to their liking are included. If instructors want to make the
PowerPoint presentation available to students, they can place it on their Web site (or the site for
their course).
Support Web site for Instructors
This password protected Web site includes some of the same essential resources that can be found on
the Instructor’s Resource CD, including instructor’s manuals and test banks in Microsoft Word, and the
PowerPoint lecture and exhibit slides. To get access to the site to download these supplements, register
online at http://academic.cengage.com/economics/gwartney.
POWERPOINT
A set of presentations has been developed to accompany the text. The presentations were prepared
Part 1/Introduction ❖ 5
Using the Internet4Classrooms web site, the next sections describe how to use some of the main
features of PowerPoint within the Windows environment for Office XP. The site also provides
information about using PowerPoint in the Office 2007 and Office 97 environments as well.
To create a new slide and choose a template:
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Frequently Asked Questions
Can I customize my presentation?
Yes. The slides can be customized in a variety of ways. For example, clip art can be added; slides
added or deleted; hyperlinks inserted; and sounds added. For details on how to do some of these
changes, see the discussion on the previous pages.
At what point in my lecture do I show the presentation?
How long does each presentation take to show?
Are there any potential problems with using the presentations?
One has to be careful not to make the course too “canned” when using the PowerPoint
Part 1/Introduction ❖ 7
COGNERO
Access from Anywhere
Web-based software that runs in a web browser. No installs are required to start using Cognero.
Works in Windows, Mac, and Linux browsers.
Desktop-Like Interface
Looks and feels like a desktop application. Uses the latest web functionality to imitate desktop
usability features like drag-and-drop and wizards.
Full-Featured Test Generator
Author and manage your assessment content as well as build tests using the only online test
generator that supports all of the major functionality of its desktop competitors. Cognero is
complete with a full-featured word processor, multi-language support, Math-ML compliant
equation editor, algorithmic content support, native support for 15 question types (true/false,
Class Management and Assignments
Manage your students, classes, and assignments with the ease of simple drag-and-drop. You can
build or import rosters, have students self-register for a class, and move students easily from class
to class. Once your roster is set, simply drag a test to a class to schedule and put your students to
work.
Secure Online Testing
Cognero has an integrated secure online testing center for your students. Along with delivering
traditional tests, your students can receive immediate feedback on each question and/or receive a
detailed end of assignment report to help them know exactly how they are doing.
Complete Reporting System
What is the use of assessment without being able to disseminate the data derived from it? Cognero
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Technical Support
Technical support can be found at: http://poweron.cengage.com/magellan/TechSupport/login.aspx
Hardware Requirements
Cognero is a completely web-based application that runs in the following browsers:
Windows
Firefox 3.5 and higher (recommended)
Part 1/Introduction ❖ 9
MOVIES IN THE CLASSROOM
An exciting and effective way to increase student interest in principles of economics classes is to
show short movie clips (three to seven minutes) that highlight economic concepts. It also has the
advantage that shows students the real-world applicability of the economic analysis. The author’s
experience with this technique in their classes has been very positive. Furthermore, showing movie
clips in class has become increasingly feasible as more and more classrooms have been updated to
include DVD players as well as projectors.
The text has interspersed some examples of how movie clips can be used to illustrate economic
concepts with the boxes titled “Economics in the Movies.” For example, a box in chapter 2
discusses how the movie Wall Street the concept of gains from trade. The relevant scene is when in
response to a question Charlie Sheen poses to Michael Douglas about how much money is
“enough,” he replies: “It’s not a question of enough, pal. It’s a zero-sum game. Somebody wins;
somebody loses. Money itself isn’t lost of gained; it’s simply transferred from one person to
another.” After showing the scene one could point out that Michael Douglas is wrong. In the real
world voluntary trade is a positive-sum game, meaning that wealth is created, and both parties gain.
It is not a zero-sum game, where gains to one person result in losses to another.
As another example, a box in chapter 14 explains how the movie It’s a Wonderful Life provides a
nice lesson in fractional reserve banking. In the scene, when everyone shows up at James Stewart’s
bank and wants to withdraw their money, he explains that their money is not in the vault, but instead
investment in their neighbors’ homes. Thus, he cannot give everyone their money because the bank
uses the deposits to make loans to other people.
The following is a list of the other movies discussed in the text: Chapter 1: Ferris Beuller’s Day
Off; Chapter 3: Pretty Woman; Chapter 5: Along Came Polly; Chapter 16: Seabiscuit; Chapter 18
(16 Micro): Cast Away; Chapter 23 (10 Micro): You’ve Got Mail; Chapter 24 (11 Micro): A
Beautiful Mind; Chapter 27 (14 Micro) A Knight’s Tale.
Two approaches can be done to show movies in the classroom. First, one can purchase or rent a
DVD of the movie. To prevent fumbling around during the class period, it is important to queue up
the appropriate scene on the DVD before the class has started. It is important to note showing a
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STOSSEL VIDEO CLIPS FOR THE TEACHING OF ECONOMICS
Most instructors are looking for ways to get their students engaged and excited while developing
their critical thinking skills. Three DVDs containing short video clips from John Stossel will help
you achieve these goals.
Two DVDs containing 31 short (3 to 7 minute) video clips are available from ABC News:
2. “Teaching Tools for Macroeconomics, Government and International Trade from John
Stossel”
The most recent Stossel DVD is entitled Making Economics Come Alive. This DVD contains 18-3
to 6 minute clips covering both micro and macro topics. It was compiled from segments of the
Most instructors are looking for ways to get their students engaged and excited while developing
their critical thinking skills.
Two DVDs containing 31 short (3 to 7 minute) video clips are available from ABC News:
1. “Teaching Tools for Microeconomics from John Stossel” and
2. “Teaching Tools for Macroeconomics, Government and International Trade from John
Stossel”
A third DVD containing four additional clips is available free of charge from
www.stosselintheclassroom.org.
These short (3 to 7 minute) video clips will enrich your class and help bring economics alive in your
classroom. Topics covered by the videos include: opportunity cost, gains from trade, competition,
the invisible hand, price controls, subsidies, property rights, entrepreneurship, real versus nominal
gasoline prices, unemployment, poverty, outsourcing, taxes, government spending, and economic
Part 1/Introduction ❖ 11
freedom. Initially prepared for ABC television (20/20 and various Stossel specials), they have been
chosen and, in some cases, modified for classroom use. They are the best of John Stossel designed
just for your economics class. The DVDs come with an Instructor’s Manual prepared by James
Gwartney, John Morton, Joe Calhoun, Mark Schug, and Tawni Ferrarini. This manual provides
users with discussion questions, related activities and exercises, and testing materials for each of
DVD 1, Microeconomics: Concepts, Wealth Creation, and Earnings
Clip 1: Opportunity costs, tradeoffs, and secondary effects (Chapters 1 or 2 of Economics:
Private and Public Choice)
Description: The segment illustrates marginal thinking by weighing the marginal benefits of an
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Clip 2: Economics of private property rights (Chapter 2)
Description: This segment addresses private and public (common) property rights and how they
change the incentives of individuals to take care of things. The segment uses two examples to
Clip 3: Exchange and wealth creation (Chapter 2)
Description: The segment begins with a description of the Vanderbilt mansion, the yacht and lavish
parties with Imelda Marcos, the wife of the former dictator of the Philippines, and the shopping
Clip 4: Invisible hand; how steak gets to New Yorkers (Chapter 3)
Description: The segment illustrates market coordination and Adam Smith’s “invisible hand” by
tracing the people and steps involved to get beef from Iowa to New York City.
Clip 5: Rent controls (Chapter 4)
Description: Rent control is intended to assist low-income families in obtaining adequate housing
and is currently used by about 200 American cities. Using New York City as an example, the rent
control program is found to help mostly high-income families by keeping their rent below market
prices. The secondary effects are to decrease new housing in the market, increase prices for property
not under rent control, and create an incentive for landlords to either let their buildings deteriorate
or abandon their investment.
Clip 6: Pharmaceuticals price controls and availability (Chapter 4)
Description: The clip illustrates the general impact of price controls. Protestors against U.S.
pharmaceutical companies claim prices are too high and do not reflect the costs to bring the drug to
market. The segment reveals that most drugs never make it to market but the companies incur large
research and development costs which, if such research is going to continue, must be covered by
revenues from the drugs that do make it to market.
Clip 7: Subsidized flood insurance (Chapter 4)
Description: The segment outlines John’s personal experience with oceanfront property and
Part 1/Introduction ❖ 13
Clip 8: Politics, economics, and farm subsidies (Chapter 4 or 6)
Description: The main theme of the segment is farm subsidies. A cotton farm in California is used
as a case study to consider both the economic and political factors underlying farm subsidy
programs.
Clip 9: Wal-Mart, competition, and cost control (Chapter 22 or 23)
Description: Wal-Mart is both loved and vilified. Critics suggest that the company wrecks
Clip 10: Poverty and entrepreneurship (Chapter 28)
Description: By using Steve Mariotti, a teacher in one of New York City’s worst high schools, as
an example the clip addresses the entrepreneurship process.
Clip 11: Wage Discrimination (Chapter 26 or Special Topic 11)
Description: On the surface, the earnings difference between men and women appears to be wage
discrimination. Women currently earn 78.5% of men’s wages. Martha Burk, chairman of the
Clip 12: Child labor laws (Chapter 26)
Description: The major point of the segment is to identify the government’s role in regulating labor
markets with an emphasis on children. The segment features an example of an underage batboy
working past 7 p.m.
Clip 13: Investment versus giving (Chapter 27)
Description: After Ted Turner announced his gift of one billion dollars to U.N. charities, the media
Clip 14: Is making money good or bad? (Chapter 3 or 23)
Description: Through an interview with T.J. Rodgers, founder of Cypress Semiconductor, the role
of the profit motive is brought to life. By “making money” Rodgers generates substantial wealth
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Clip 15: Poverty in the US (Chapter 28)
Description: The segment brings to light some of the items included and not included in the official
wage data. The Federal Reserve data that’s often cited doesn’t include such items as sales
commissions, retirement contributions, and medical insurance. When these items are included,
compensation has increased 20% instead of staying flat or going down as some suggest.
Clip 16: School Choice (Special Topic 10)
Description: The segment illustrates the difference between what politicians vote for in the
legislature and what they do in their private lives.
DVD 2, Macroeconomics: Concepts, International Trade, and the Role of Government
Clip 1: Is life getting worse? (Chapter 1 or 7)
Description: The segment dispels the notion that life is worse or more difficult and risky today
than in the past. During an interview, several 100-year-olds emphatically agree that life is better
Clip 2: Gas prices-nominal versus real (Chapter 7)
Description: Without being too technical or mathematical, the segment clearly illustrates the error
of comparing nominal (current) prices across time periods.
Clip 3: Unemployment and labor mobility (Chapter 8 or 26)
Description: Using the labor market in Youngstown, Ohio as an example, the segment addresses
Clip 4: Government spending, jobs, and unemployment (Chapter 11 or 12)
Description: John breaks several windows in an apartment to illustrate how jobs would be created
by the destruction. Cleaning crews, window repairmen, glass manufacturers, and many others
Clip 5: Stadiums, subsidies, and taxes (Chapter 4 or 6, or Special Topic 1)
Description: The segment uses the new baseball stadium for the Chicago White Sox as an example.
Part 1/Introduction ❖ 15
Clip 6: How much taxes do the rich pay? (Chapter 4 or Special Topic 1)
Description: The segment documents the proportion of income taxes paid by the wealthiest
Americans. At the beginning of the clip, the Reverend Al Sharpton, former Democratic presidential
candidate, claims the top 1% of income earners pay less than 5% of total income taxes. He suggests
they should pay 15%. The fact is that the top 1% of income earners already pay 34% of the total
income tax collected by the IRS. The clip can be used to illustrate the taxes paid by various groups
and the difference between average and marginal tax rates.
Clip 7: Are boycotts of sweatshop products helpful? (Chapter 16 or 18)
Description: The role of profits in business activity to import goods from cheaper, foreign
countries is a general theme. The segment includes scenes from various student protests regarding
Clip 8: Does Outsourcing Cost Americans Jobs? (Chapter 18)
Description: Lou Dobbs of CNN argues that outsourcing is bad and should be limited. However,
as some jobs are sent to foreign countries, labor resources are freed up to move to more productive
Clip 9: Economic freedom and prosperity (Chapter 17)
Description: A single point is made in this segment. Where economic freedom and liberty are
allowed to flourish, economic growth and prosperity follow. The clip compares and contrasts places
Clip 10: Institutions, growth, and freedom (Chapter 17)
Description: The segment compares and contrasts the ease with which businesses operate in India,
the United States, and Hong Kong. Several entrepreneurs are interviewed to describe their
experiences in the different countries.
Clip 11: Property rights, eminent domain, and the role of government (Chapter 2 or 16)
Clip 12: Is government too big? (Chapter 6 or Special Topic 1)
Description: The overriding theme is that taxes are high and placed on numerous goods in order
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Clip 13: Size and growth of government (Chapter 6 or Special Topic 1)
Description: The segment discusses and uses an enlightening graphical image to document the
size and growth of the U.S. government since 1800. Despite politician’s claims to reduce spending,
government spending has increased dramatically during the past century.
Clip 14: Pork barrel spending (Chapter 6)
Description: Voting behavior and collective decision-making are the two major concepts
Clip 15: Competition and efficiency of government (Chapter 6 or Special Topic 1)
Description: Private versus public production is the theme of the segment. The incentives of cost
minimization and efficiency are discussed under the two alternative forms of ownership.
DVD, Stossel in the Classroom, 2007 edition
(Note: There are 4 clips on this DVD. It is available free of charge to teachers at
http://stosselinclassroom.org.)
Clip 1: Stereotypes (Chapter 28)
Description: How much do expectations of success or failure influence how students actually
perform? John Stossel examines whether a bold experiment from decades ago still holds true today.
Clip 2: Foreign aid (Chapter 16)
Description: Some say that more foreign aid is the answer to poverty in Africa. But after billions
of dollars in aid, individual Africans are worse off than before. John Stossel asks the experts, “Is
there a better way to help the poor?”
Clip 3: Price gouging (Chapter 4)
Description: After natural disasters, some businesses raise prices on essential goods and services.
Is that evil? Exactly the opposite, say three Nobel Prize-winning economists. John Stossel uncovers
why in this lesson about supply and demand.
Clip 4: Oil supplies: Are we running out of oil? (Special Topic 12)