Modern Principles Microeconomics and Macroeconomics Tyler Cowen and Alex Tabarrok See the Invisible Hand Understand Your World

The Romance  Roses in February in Chicago. Quite incredible. Where do the Roses come from? Not from nearby greenhouses!

Bloemenveiling photo by Wilfried Overwater.

Markets are Cooperative  A rose is a truly international product.  The market for roses links romantic Americans with South American flower growers, Dutch clocks, Finnish cell phones, Colombian coffee (to keep the pilots awake) and much more.  Hundreds of thousands of people from Ecuador to Chicago cooperated to bring the rose to our handsome young man and they did so voluntarily, on the basis of self interest, and without central direction - this is the invisible hand in action.

The True Importance of the P=MC Condition of Profit Maximization

A How to Minimize the Total Costs of Corn Production Across Two Farms Increase in Costs Savings C = A-B Decrease in Costs $ 200th unit Cost of Producing 200 th Unit MC 1 Quantity (Bushels of Corn) 0 25 $ Farm One MC 2 Quantity (Bushels of Corn) $ Farm Two C B

MC Quantity (Bushels of Corn) $ MC Quantity (Bushels of Corn) $ Farm One Farm Two To Minimize Total Costs Set MC 1 =MC 2

Pat Sets P =MC 1, Alex sets P =MC 2 as a result MC 1 =MC 2 A Much More Difficult Problem $2.50 Price of Corn MC Quantity (Bushels of Corn) $ MC Quantity (Bushels of Corn) $ Pat’s Farm Alex’s Farm

Price of Corn MC Quantity (Bushels of Corn) $ MC Quantity (Bushels of Corn) $ Pat’s Farm Alex’s Farm Pat Sets P =MC 1, Alex sets P =MC 2 as a result MC 1 =MC 2

MC Quantity (Bushels of Corn) $ MC Quantity (Bushels of Corn) $ Pat’s Farm Alex’s Farm Pat Sets P =MC 1, Alex sets P =MC 2 as a result MC 1 =MC 2 Price of Corn

MC Quantity (Bushels of Corn) $ MC Quantity (Bushels of Corn) $ Pat’s Farm Alex’s Farm Pat Sets P =MC 1, Alex sets P =MC 2 as a result MC 1 =MC 2 Price of Corn

MC Quantity (Bushels of Corn) $ MC Quantity (Bushels of Corn) $ Pat’s Farm Alex’s Farm The True Importance of the P=MC Condition is P=MC 1 =MC 2 …=MC N Price of Corn $2.50

Teaching Resources Videos, Powerpoints, experiments, and blog posts that are especially relevant to teaching principles of economics are collected at SeeTheInvisibleHandResourceBank.com SeeTheInvisibleHandResourceBank.com Keyed to Modern Principles but relevant for all principles of economics teaching. You can also find Modern Principles on Facebook. Like the page and you will get a few posts a week with useful material keyed to typical class progression.