Part I — Thinking Like an Economist
The mindset before the models.
Most introductory economics textbooks start with supply and demand. We don't, and the four chapters that make up Part I are the reason. Before you can usefully analyze a market, you need to know what economics is, why economists use models at all, why specialization makes everyone richer, and how to read the economic data the rest of the book will reference. Those four habits — scarcity-aware thinking, model-aware thinking, trade-aware thinking, and data-aware thinking — are the prerequisites for everything that follows. They are also useful in their own right, even if you never read another chapter.
Chapter 1 — What Is Economics? introduces the four foundational ideas of the economic way of thinking: scarcity, opportunity cost, marginal thinking, and incentives. The chapter is built around a relatable choice (a Millbrook State student deciding between a study group and a paid hour at her campus job) and uses that choice to walk you through what economists mean when they say "the cost" of a decision. By the end of the chapter, you should be able to look at any decision and identify what was given up to get what was chosen.
Chapter 2 — How Economists Think explains why economists build models. The chapter introduces two of the simplest models in economics — the production possibilities frontier and the circular flow diagram — and uses them to show what models are good for (clarifying tradeoffs and tracing connections) and what they are not good for (predicting the future with confidence). The chapter also distinguishes positive economics ("what is") from normative economics ("what should be") and lays out the four reasons economists honestly disagree with each other. That honesty is a thread the whole book will pull on.
Chapter 3 — Interdependence and the Gains from Trade is the chapter that explains why you don't grow your own food. It introduces absolute advantage and comparative advantage with a clean two-person numerical example, then scales the same logic up to firms and countries. By the end of the chapter, you should be able to explain why trade benefits both parties even when one party is better at everything — a result that is both mathematically correct and counterintuitive enough that even bright readers often need to see it twice. We use Millbrook's Riverside Foods plant as the running example: a regional frozen-vegetables processor that doesn't make every food product Millbrook eats and that benefits from trading with farmers and consumers far outside its own walls.
Chapter 4 — How to Read Economic Data is the chapter Mankiw doesn't have. The chapter walks through a real BLS jobs report, a real CPI release, and a real FRED chart — and shows you the most common ways economic data is presented misleadingly. It is the chapter that gives you the tools to fact-check your own future readings of economic news. From Chapter 5 forward, every chapter will assume you have these tools and will point you toward FRED data series in its exercises.
By the end of Part I, you should feel that economics is for you — not a foreign discipline you are visiting, but a way of thinking about choices that you already do every day. Now you can put names on the moves you were already making.