Issue 20, Spring 2001

William A. McEachern, Editor

Grapevine

Terry Liska at the University of Wisconsin - Platteville believes the three most important elements in student learning are application, application, and application. He is always on the lookout for applications of economic concepts. For example, he observes that additional copies of a particular newsletter are priced at a large multiple above the cost of using the "underground market," which in this case is the department copier. Hence that newsletter would likely be copied. To reduce underground activity, the newsletter should lower the price of multiple copies.

Eric K. Steger of East Central University in Ada, Oklahoma likes to talk with students about what happens when the market-clearing price exceeds the retail price. Among the examples he has offered include the Mazda Miata, where the selling price was initially well below what would have been the market-clearing price. Early Miata buyers could resell the cars at substantial mark-ups. As time passed, however, supply and demand shifted such that the retail price moved toward the market-clearing price, as theory would predict. On a different point, he asks students if the law of demand is operative, why would anyone pay for Internet service when free alternatives are available? Answers include habit, time and effort involved in changing e-mail addresses, no local access telephone number, no local telephone number for customer assistance, and having to put up with advertisements on the bottom of the computer screen. Professor Steger explains to students that some of these factors are "transactions costs" that help explain various prices for competing services. He notes that all costs are not monetary. I might add that many of these "free" Internet services have gone broke, and one of the biggest, K-Mart's Blue Light site, is cutting users back to 25 free hours a month.

Ken Norman of Richland College in Dallas sent in a poem he wrote for students entitled "A Story of Economic Thought." Consisting of seven stanzas with eight lines each and a rhyming scheme of aabbccdd, the poem plays on the seven days in which God created the world. Each stanza parallels a day of creation and features an economist or school of thought, including Smith, Keynes, Friedman, and Lucas. Here are the opening lines: "In the beginning, God created Adam Smith, who penned The Wealth of Nations, And he decreed that wealth was not gold or silver but better productivity through specializations," OK, not great poetry, but the full poem does reinforce some useful points, and he says his students seem to enjoy it. You can e-mail him for a copy at KNorman31@aol.com.

Finally, I received the following from Richard Schiming of Minnesota State University, Mankato (richard.schiming@mankato.msus.edu). Since his contribution is longer and more detailed than usual, it appears as submitted (with only light editing).

"Building an Economic Utopia: A Capstone Activity"

Like many economics departments, ours recently added a senior seminar as the capstone course for our majors. I used the following activity in that course with great success.

I required each student in the seminar to construct her or his own economic utopia. Developing these utopias would encourage them to (1) employ their knowledge of economic principles and institutions in a creative and comprehensive fashion and (2) reflect in a meaningful way on the nature of a good economic society. Both the positive and normative aspects of economics would thus be present. To aid the process, students received weekly worksheets outlining specific areas to consider in developing their utopias. The four areas are (1) physical characteristics (time, place, and population, etc); (2) social institutions (politics, education, family and marriage, etc); (3) economic institutions (monetary arrangements, role of government, labor markets, etc); and (4) what/how/for whom (how their utopias answered these three basic questions). After students received each worksheet, each prepared a rough draft of that area to present during the next class session. The class discussed each presentation. My role was primarily a facilitator during these conversations. Each student would then rethink and revise the draft. After we discussed all four areas in class, each student would then prepare a final draft. The entire process took about eight class sessions spaced over four weeks.

All students rated this activity very highly on the course evaluations. Building these utopias encouraged students to use creatively much of the economics they had learned in our program. By commenting on each other's drafts and by revising their own drafts, students refined their thinking about the role of economics in society. This exercise also offered practice in the oral and written communication of economic concepts. For me, I gained a great deal of insight into how our seniors view the usefulness and relevance of economics.

Top                                                                                                                                                                                          Next