Public choice uses the tools of economics to analyze how the political process allocates resources and impacts economic activity. In this study, the authors examine twenty-three principles texts regarding coverage of public choice, market failure, and government failure. Approximately half the texts provide coverage of public choice and recognize…

The typical profit-maximization solution for the joint-production problem found in intermediate texts, managerial texts, and other texts concerned with optimal pricing is oversimplified and inconsistent with profit maximization, unless there is either no excess of any of the joint products or no costs associated with dumping. However, it is an…

Authors of intermediate microeconomics textbooks devote relatively more space to imperfectly competitive markets than can be justified by their relative occurrence in actual markets. This gap has persisted for at least 40 years, even with an almost complete turnover of authors between the decades of the 1960s and the 2000s. This portrayal gives…

Third-degree price discrimination is taught in almost every intermediate microeconomics class. The theory, geometry, and the algebra behind the concept are simple, and the phenomenon is commonly associated with the sale of many of the goods and services used frequently by students. Classroom discussion is usually vibrant as students can relate…

Contends the downward-sloping aggregate demand curve is a simple and effective tool for analyzing factors that influence activity in the economy. Develops arguments against claims that other factors distort the reliability of the downward-sloping aggregate demand curve. States that textbooks should continue using this concept. (RKM)

Claims that many intermediate macroeconomic textbooks contain incorrect examples of aggregate demand curves. Diagrams correct and incorrect curves and discusses how incorrect diagrams can lead students to draw wrong conclusions. Argues that textbooks should not sacrifice correctness for simplicity. (RKM)

Responds to claims about the instructional value of the downward-sloping aggregate demand curve in teaching principles of macroeconomics. Examines the effects of interest-rates and the role of money on demand curves. Concludes by arguing against the use of downward-sloping aggregate demand curves in textbooks. (RKM)

Keynes's explanation of both the rationale underlying downwardly sticky money wages and the consequences this phenomenon has for macroeconomic theory are reviewed. An aggregate supply curve appropriate to today's economy is then interpreted. (Author/RM)

An externality is an activity on the part of one party that enters directly into another party's utility or production function. The distinction between genuine and pecuniary externalities should not be based on their differing impacts on relative prices, but rather on their impacts on third parties' utility and production functions. (Author/RM)

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…

Explains that the endogeneity of the efficient frontier in the mean-variance model of portfolio selection is commonly obscured in portfolio selection literature and in widely used textbooks. Demonstrates endogeneity and discusses the impact of parameter changes on the mean-variance efficient frontier and on the beta coefficients of individual…

Elucidates general principles that need to undergird economics textbooks. States that they should at least provide a combination of data and theory, where the theory explains the data which, in turn, illustrates the theory. Concludes that texts should transmit real knowledge of complex systems and economies so that future disastrous mistakes might…

Focusing on areas of contention, the author responds to "Principles of Economics Textbooks: Innovation and Product Differentiation" by Stiglitz. Contends that Stiglitz's description of principles textbooks is insufficient, states that the textbook market is more oligopolistic than monopolistic, and cautions writers against deleting parts…

Identifies sources of ambiguity in economics textbooks' discussion of the condition for efficient output mix. Points out that diverse statements without accompanying explanations create confusion among students. Argues that conflicting views concerning the concept of Pareto optimality as one source of ambiguity. Suggests clarifying additions to…

The authors argue that the textbook treatments of the constant term in regression analysis vary extensively and are often neglectful, incomplete, or even incorrect. Given the potential importance of the constant coefficient in theoretical and applied work, they develop the factors biasing the estimation of the constant term to support the argument…