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Learning to Speak Economics

Robert H. Frank
CSC-ESS Forum @ Civil Service College
November 16, 2009
Id like to introduce you to Marty Thorndecker.
Hes an economist but hes really very nice.
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Most students who take introductory
economics leave the course without really
having learned even the most important
basic economic principles.
Their ability to answer simple economic
questions several months after leaving the
course is not measurably different from
that of people who never took a principles
course.*
*Hansen, W. L., M. K. Salemi, and J . J . Siegfried. 2002. Use It or
Lose It: Teaching Economic Literacy. American Economic
Review (Papers and Proceedings), 92 (May): 463-72.
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How much can I cover today?
vs.
How much can my students absorb today?
The opportunity cost of engaging in an
activity is the value of everything you must
sacrifice to engage in it.
Opportunity Cost
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Do students learn the opportunity cost concept
successfully?
Do Economists Recognize an Opportunity
Cost When They See One? A Dismal
Performance from the Dismal Science,
Paul J . Ferraro and Laura O. Taylor
Georgia State University
Please Circle the Best Answer to the
Following Question:
You won a free ticket to see an Eric Clapton
concert (which has no resale value).
Bob Dylan is performing on the same night and
is your most attractive alternative.
Tickets to see Dylan cost $40.
On any given day, you would be willing to pay
up to $50 to see Dylan.
This is your only chance to see either performer
and there are no other costs than the ones
mentioned.
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You are willing to pay as much as $50 to
see Dylan
The cost of Dylan ticket = $40
Based on this information, what is the
opportunity cost of seeing Eric Clapton?
a. $0
b. $10
c. $40
d. $50
Correct answer = b. $10
7.4 percent of 270 undergraduates who had
previously taken a course in economics
answered this question correctly.
17.2 percent of 88 undergraduates who had
never taken a course in economics
answered the question correctly.
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Of 199 PhD economists and graduate
students who answered the question at
the 2005 AEA meetings:
25.1 percent chose a. $0
21.6 percent chose b. $10
25.6 percent chose c. $40
27.6 percent chose d. $50
Why do residents of Manhattan tend to be rude
and impatient, while residents of Topeka tend to
be friendly and courteous?
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The Revolution in Language Instruction
Start simple
Repetition and drill
Active learning
Yo topi mahango chha.
(This hat is expensive.)
The Cost-Benefit Principle
An individual (or a firm, or a society) should
take an action if, and only if, the extra
benefits from taking the action are at least
as great as the extra costs.
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Example 1
You are about to buy a
$20 alarm clock at the
campus store when a
friend tells you that K-
mart has the same
alarm clock on sale for
$10.
Do you drive
down to K-mart?
Example 2. You are about to buy a $2510
laptop computer from the campus store
when a friend tells you that K-mart has the
same computer on sale for $2500.
Do you drive down
to K-mart?
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Should you drive down to K-mart?
Benefit of driving down to K-mart
= $10 in both cases
Cost of driving down to K-mart
= the same amount in both cases.
So your answer should be the same in both
cases.
Exercise. You have a travel coupon that can
be used on either of two upcoming trips:
Save $90 on your $200 round-trip ticket to
Chicago
or
Save $100 on your $2000 round-trip ticket to
Tokyo.
For which trip should you use the coupon?
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Why do the keypad buttons on drive-up
automatic teller machines have Braille dots?
Bill Tjoa
The Economic Naturalist Writing Assignment
Knowing biology makes it possible to discern
additional pattern and texture in natural
environments.
Why, in most species, are males bigger
and more colorful than females?
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The exception that proves the rule:
Very little sexual dimorphism in monogamous species.
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The Narrative Theory of Learning
At its core, the narrative perspective holds
that human beings have a universal
predisposition to 'story' their experience,
that is, to impose a narrative interpretation
on information and experience.
Narrative and learning to teach: implications for teacher- education
curriculum, Walter Doyle and Kathy Carter
http://faculty.ed.uiuc.edu/westbury/J CS/Vol35/DOYLE.HTM
[children] turn things into stories, and
when they try to make sense of their life
they use the storied version of their
experience as the basis for further
reflection.
If they don't catch something in a narrative
structure, it doesn't get remembered very
well, and it doesn't seem to be accessible
for further kinds of mulling over.
J erome Bruner (1985) Narrative and paradigmatic modes of thought. In E. W.
Eisner (ed.), Learning and Teaching the Ways of Knowing, 84th Yearbook,
Part 2, of the National Society for the Study of Education (Chicago:
University of Chicago Press), 97--115.
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Your question must be interesting.
Your answer (500 words max) must be
plausible.
Why do brides spend so
much money on
wedding dresses, while
grooms often rent cheap
tuxedos, even though
grooms could potentially
wear their tuxedos on
many other occasions
and brides will never
wear their dresses
again?
Jennifer Dulski
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Why are child
safety seats
required in
cars but not in
airplanes?
Greg Balet
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Why are round-trip fares from Hawaii to the
mainland higher than the corresponding
fares from the mainland to Hawaii?
Karen Hittle
Why might retailers hammer dents into
their own appliances?
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Why does a $500 tux
rent for $90 a day while
a $20,000 car rents for
$40 a day?
Jon Gotte
Why do many
fast food
restaurants post
signs like this?
Sam Tingleff
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Why do
female
models earn
so much
more than
male
models?
Fran
Adams
Why do airlines charge much more for tickets
purchased at the last minute, while Broadway
theaters follow exactly the opposite practice?
Gerasimos Efthimiatos
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Why did kamikaze pilots wear helmets?
Chanan Glambosky
If polygamy is such
a great deal for
men, why do
predominantly
male legislatures
enact statutes
prohibiting it?
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Adam Smiths
invisible hand:
Self-interested
demands will result
in a socially
efficient allocation.
Charles Darwin: Traits
are selected because
of their impact on the
reproductive fitness of
individuals, not groups.
Traits that benefit
individuals often work
to the disadvantage
of groups.
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Big antlers: Smart for one, dumb for all?
Forms of Discourse:
Individual vs. Collective Incentives
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Excessive formalism in economics
The holder [of a CAB certificate] may continue
to serve regularly any point named herein
through the airport last regularly used by the
holder to serve such point prior to the effective
date of the certificate. Upon compliance with
such procedures relating thereto as may be
prescribed by the Board, the holder may, in
addition to the services hereinabove expressly
prescribed, regularly serve a point named
herein through any airport convenient thereto.
Bureaucratic Language
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I propose to embrace tactical strategies in
moving in disruption of the dichotomy, as
crucial to an epistemology of
resistance/liberation. To do so is to give
uptake to the disaggregation of collectivity
concomitant with social fragmentation and
to theorize the navigation of its perils
without giving uptake to its logic
Maria Lugones,
Tactical Strategies of the Streetwalker
Discourse in the Humanities
Bigger Mansions: Smart for One, Dumb for All?
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