TEACHING TOOLS: TEACHING METHODS IN UNDERGRADUATE ECONOMICS

Lectures have long been the dominant pedagogical approach in undergraduate economics courses, but they are certainly no longer the exclusive approach. Much of the recent soul-searching in the discipline, dealing with the desirable characteristics of economics programs and their graduates, has largely ignored the issue of promoting the use of innovative and more active forms of teaching and learning. We review a considerable literature on new teaching approaches, developed by economists over the past twenty-five years, and argue that this should also be a part of the current debate about curriculum and training reforms for the profession.     

TEACHING TOOLS: COOPERATIVE LEARNING IN ECONOMICS

Cooperative learning is a structured, systematic instructional technique in which students work together in small groups toward a common goal. We demonstrate the effectiveness of cooperative learning with an illustrative example for teaching the labor supply curve. Recommendations for introducing the technique, forming groups, the instructor's role during group work, grading and extensions of cooperative learning to other topics are discussed.     

TEACHING TOOLS: HOW IS INTRODUCTORY ECONOMICS TAUGHT IN AMERICA?

We describe the faculty, students, teaching methods, and assessment instruments used in 180 introductory economics classes taught by 122 different instructors at 53 different colleges and universities. Despite variation in class size and types of institution, both introductory macroeconomics and introductory microeconomics are taught predominantly as lecture courses, with the largest part of students' course grades determined by performance on multiple-choice question tests. There seems to be little experimentation with alternative pedagogies or assessment techniques despite an in-creasing amount of attention to these issues in recent years.     

TEACHING TOOLS: ON JOURNALISTS' USE OF MACROECONOMIC CONCEPTS

Five macroeconomic concepts are presented which are prominent in the business sections of newspapers, but which are not given equivalent prominence in macroeconomic textbooks. These are the discouraged worker phenomenon, the use of inventories in forecasting, the effect of changes in the money supply on the bond market, and the effects of inflation and nominal interest rates in the foreign exchange market. These concepts are presented via news clips illustrating the way they typically appear in the press. Instructors are urged to place extra emphasis on these concepts.     

TEACHING TOOLS: A POLLUTION RIGHTS TRADING GAME

This article describes a classroom game in which students simulate the US. EPAS market for emission allowances to understand the efficiency benefits of market-based incentives for pollution control. It can be used in either a principles or environmental economics course. Acting as managers of coal-fired power plants facing different clean-up costs, students compare the cost of pollution reduction to the cost of acquiring permits to emit pollution. The game can be conducted in one 50-minute class period with discussion of the results carried over to the next class. (JEL A2)     

TEACHING TOOLS: SIMULATING MONEY SUPPLY CREATION IN CLASS

Students in introductory economics or intermediate macroeconomics can learn and experience the process of creating money through an interactive simulation in which students play the roles of bankers, loan customers, and business firms. The simple version of this simulation is easy to set up, though many instructors will find the more structured version worth the additional setup cost. During the structured simulation, students encounter other macroeconomic concepts such as the marginal efficiency of investment curve, and broad versus narrow money. This simulation offers some experiential learning and adds variety to a macroeconomics course. (JEL A22)     

TEACHING TOOLS EXPERIENTIAL LEARNING IN THE UNDERGRADUATE CLASSROOM: TWO EXERCISES

We describe two classroom exercises which can be used to reinforce undergraduate students' understanding of (1) production and cost concepts and (2) the concept of economic scarcity. In the first exercise, students use their experience in producing "widgets" in a single variable input environment to derive a wide range of production and cost data. In the second exercise, students use their experience in producing two goods under various allocations of a fixed set of resources to generate a production possibilities frontier. The resulting links between concept and experience enhance students' understanding of these important concepts.     

TEACHING TOOLS: INTERTEMPORAL RESOURCE ALLOCATION: DISTRIBUTIVE ISSUES SURROUNDING GASOLINE PRICE HIKES

This paper shows that many people misinterpreted the gasoline price increases that followed Iraq's invasion of Kuwait in August 1990. Consumers expressed outrage when prices increased immediately even though a production shortfall did not materialize for several weeks. But by withholding output in the invasion's aftermath arbitragers (including oil companies) reallocated output intertemporally to make more available when it was needed most. The welfare consequences in general depend upon demand elasticities and their rate of change, but in this instance consumer surplus would probably have been maximized with a full and immediate price adjustment and oil companies profited from their restraint.     

TEACHING TOOLS: SHOULD WE TEACH MICROECONOMIC PRINCIPLES BEFORE MACROECONOMIC PRINCIPLES?

No consensus exists about the optimal sequencing of economics principles courses. We show that most top-ranked economics departments either do not specify an ordering or require microeconomics first, while most textbooks present macroeconomics before microeconomics. Using a national economic education database, we find that students learn more in principles of microeconomics after taking a course in macroeconomics. However, students do not learn more in principles of macroeconomics after taking a course in microeconomics. This implies that, ceteris paribus, principles of macroeconomics should be taught before principles of microeconomics for optimal student learning.     

TEACHING TOOLS: WHY WORKERS SHOULD WANT MANDATED BENEFITS TO LOWER THEIR WAGES

Mandating that employers provide job-related benefits is not a free lunch for employees. Despite the claims of some advocates of mandated benofts, economists have long recognized that much of the cost of those benefifs is passed on to employees in lower wages. What has gone unrecognized is that the more employees pay fir a mandated bentefit relative to its cost the more they gain from having the benefit provided.     

THE ECONOMICS OF CARPOOLS

The paper shows how separate parts of a work trip enter the decision to carpool, and examines how the size of a carpool is related to the gasoline price, the wage rate, speed limits, and other factors. The paper also suggests that policies designed to promote carpooling may produce perverse effects on gasoline consumption.     

THE ECONOMICS OF TERRORISM

This paper treats terrorism as an economic phenomenon— as a way to understand it and to control it. It uses the tools of substitution, innovation, and cycles and concludes by noting the importance of intelligence and that the most valuable approach to defeating terrorism is that of denying resources to the terrorists rather than attempting to protect assets at risk. It notes that we are probably not any safer than before the implementation of the post–9/11 strategies and emphasizes that new initiatives must be undertaken to prevent terrorist use of weapons of mass destruction.     

THE ECONOMICS OF AEROBICS

This study presents a simple model that weighs the benefits and costs of aerobic exercise to the individual. The model assumes that adding years to life serves as the primary benefit of exercise, and that hours of exercise over a lifetime serve as the cost. Given previous estimates of individual rates of time preference this study finds that people act rationally when they choose to watch a track event rather than choose to run themselves. (JEL I1)