October 1, 2021
ECON 101 has fallen on hard times. I won't repeat all the rebuttals to this perspective that have been offered by sophisticated true believers or by master teachers of 101.
Instead, I simply wanted to share the approach I take. Here and here are a few slide decks I’ve used for Econ 101.
Each class period centers on a question about the social world that economics illuminates. My goal is to invoke a sense of awe and wonder at the power and beauty of economic reasoning.
Posting these here because I'm always open to new suggestions.
The Economic Approach I: Do seatbelt laws kill?
The Economic Approach II: Do economists agree?
Foundations of Economics: Why should you thank your high school geometry teacher?
Economic Method: What’s the difference between a rock and a person?
Human Action: What did the Martian see at Grand Central Station?
Opportunity Cost: Do hurricanes make the world a better place?
Economic Goods: If your life depended on it, could you make an omelet?
Marginal Utility: Why do quarterbacks earn more than economics professors?
Direct Exchange: Should we “cut out the middleman”?
Direct Exchange: Are low wages exploitative?
Absolute Advantage: Whatever happened to Tasmania?
Comparative Advantage: Which state is the best for growing cars?
Property and Ownership: Where are the biggest oysters?
Indirect Exchange: Can you spare a smoke?
The Law of Demand I: In ten years, what should you remember from this class?
The Law of Demand II: Do sugar tariffs make us fat?
The Law of Supply: Why aren’t you a garbage collector?
Price Formation I: What is a price?
Price Formation II: How do prices turn enemies into friends?
Elasticity: Did Prohibition fail?
Market Changes I: What happens to ER visits when the price of water changes?
Market Changes II: What’s graphite got to do with peanut butter?
Market Changes III: How does Uber’s “surge pricing” make the world a safer place?
Factor Prices I: Will recycling paper save the trees?
Factor Prices II: What’s the deadliest job in America?
Profit and Loss I: What does it profit a main to gain the world and lose his soul?
Profit and Loss II: Is profit a four-letter word?
Cartel: What if I told you that airplane food used to be delicious?
Monopoly: Why does the DMV take forever?
Labor Unions: Who should we thank for high wages?
Price Ceilings I: Need an apartment? Search the obituaries!
Price Ceilings II: How do you conquer a city in three days (or less)?
Price Floors I: What happened to elevator operators?
Price Floors II: Why does Europe have “butter mountains”?
Taxes and Subsidies: Where did all the windows go?
Regulation I: Will concussions doom the NFL? (And what’s the solution?)
Regulation II: Will MySpace ever lose its monopoly?
Regulation III: Who wants to be regulated?
Economics Everywhere: Where can economics take you?
Here's a link to the full syllabus.
An emphasis of my course: The price system is the worst system known to mankind for allocating scarce resources, except for all the others. I strive to communicate that point in my Econ 101 course. Prices aren’t “perfect” in the sense that market competition is found in ceaseless striving, not in static equilibrium.
I often ask my students to conceive of a world where inhabitants allocate scarce resources on the basis of who has the “coolest” hairdo.
While they laugh, they’re also quick to identify a host of difficult questions, such as:
1.
Who decides what’s “cool”?
2.
How does one become a “decider” for hairdos? What does the competition for that spot look like?
3.
Who has an incentive to produce goods in a world of hairdo allocation?
4.
Most important of all, does the resulting allocating have any meaningful connection to consumers’ preferences? (No.)
A seemingly silly exercise, the hairdo thought experiment is a useful segway to allocation schemes that adults take seriously. “Need,” “merit,” “equal shares,” “first come, first served,” or “effort” are all variations on “hairdo.” Apply the four preceding questions to these possible criteria for competing.
More advanced discussions benefit from why, even in markets, we sometimes observe buyers/sellers agreeing to allocation schemes that rely on some other mechanism instead of or in addition to price. In a nutshell: it’s prohibitively costly to adjust price in every instance.
Yet, 100% of prosperous societies give tremendous berth to allocation by prices. There are no unicorns.