Examines two classes of production functions in which the long-run competitive equilibrium scale of the firm increases when the relative price of the dominant factor decreases. Compares these with a third class of production functions where the equilibrium scale is independent of the relative price of the dominant factor. (MJP)

Provides a conceptual framework for teaching price theory and the substitution effects of price changes. Uses the example of student choice of course load to illustrate the usual substitution effect of a price change between goods, and is extended to substitution among differentiated products within a heterogeneous good. (LS)

Outlines the differences between the traditional and modern theoretical models of demand for money. States that the two models are often used interchangeably in textbooks, causing ambiguity. Argues against the use of linear specifications that imply that income velocity can increase without limit and that autonomous components of aggregate demand…

Presents a diagrammatic proof for classroom use to demonstrate the quasi-convexity of the indirect utility function. Includes a variation of the price indifference curve. Suggests an exercise in which the student is asked to show that the tangency condition is a restatement of Roy's identity. (DK)

Presents a teaching model that is consistent with the traditional approach to demonstrating the expansion and contraction of the money supply. Suggests that the model provides a simple and convenient visual image of changes in the monetary system. Describes the model as juxtaposing the behavior of the moneyholding public with that of the…

Suggests that intermediate microeconomic theory instruction should emphasize individual elements of the topic as part of a general equilibrium model. Summarizes a model that can be used to highlight the unifying thread running through the subject. Discusses the submodels of the market, the consumer, the firm, and the economy as a whole. (SG)

Identifies inconsistencies in treatments of the perfect competition, monopoly welfare comparison in textbooks for economics instruction. Argues for explanation of how experiments are being conducted and explicit identification of all underlying assumptions. Suggests straightforward analysis of the social cost of monopoly based on a comparison…

Describes graphical techniques to help explain the multiple creation of deposits that accompany lending in a fractional reserve banking system. Presents a model that emphasizes the banking system, the interaction of total permitted, required, and excess reserves and deposits. Argues that the approach simplifies information to examining a slope…

Describes an attempt to estimate race and gender role-model effects in high school economics courses. Reports that no evidence of a gender role-model effect was found. Concludes that recruiting minorities into teaching careers will be beneficial because a large role model effect was found for African Americans whose mothers had not graduated from…

Presents a simple classroom simulation of the Lucas supply curve mechanism with rational expectations. Concludes that the exercise has proved very useful as an introduction to the concepts of rational and adaptive expectations, the Lucas supply curve, the natural rate hypothesis, and random supply shocks. (DB)

A method for determining the cost function for computer-assisted programed instruction is described. The teaching process modelled consists of students working at self-paced programed instruction and receiving immediate feedback provided by a computer and an instructor. The instructor is available for clarification and discussion at an individual…

Presents a diagram for figuring the value of time into an individual's labor-supply decisions and the time intensiveness of the individual's consumption patterns. Seeks to make the integration of differing time values with leisure income choices more understandable for students. (DK)

Uses five unusual indifference curve exercises to show how changing the jail sentence and changing the reward for good behavior can influence the crime rate. Recommends eliminating minimum sentencing while raising sentencing and increasing the rewards for good behavior. Includes illustrative graphs for each exercise. (MJP)

Suggests how the classic model of overlapping contracts can be incorporated into the contract wage model of aggregate supply. Illustrates dynamics of macroeconomic adjustment following a shock to aggregate demand. Concludes that overlapping contracts do not prolong the adjustment process; rather, the longest remaining contract determines the time…

Describes class exercises where undergraduates construct and test mathematical models using data and issues related to social security. The students collect data and forecast economic and demographic variables that determine future tax rates. They then discuss government policies that are derived from their models. (MJP)