Microeconomic Principles Research Articles

Measuring Up: Assessment in Microeconomics

Assessment takes place university wide, from evaluation of the entire institution to the micro focus of specific courses using learning objectives. Many faculty perceive assessment as already occurring through the assignment of grades. This paper investigates empirically the ongoing grades versus assessment debate. By examining the relationship between examination questions and post-test comprehension of learning objectives in Principles of Microeconomics, this study analyzes whether differences exist in proportions of correct responses from the two evaluation methods for each learning objective. For some of the objectives there are statistical differences found between the two proportions but insignificant differences for the remaining objectives. The authors conclude that these mixed results demonstrate exam questions and assessment post-test questions are not equal measures of student learning of course content.

Paradox of Rift: Principles of Microeconomics and Accounting Reconciled

The paper first cites Ronald Coase, who was awarded in 1991 the Nobel Prize in Economics, on his explanation why he studied accounting and not economics while a student at the London School of Economics from 1929-1931. It then explores the relationship between the diagrams of microeconomics and the balance sheet and income statement for a price-taking firm as management responds to a price change in the short and long run. Accounting and economic depreciation are distinguished. Finally the relationship between profit maximization and maximization of the firm's contribution margin is explored.

After Airline Deregulation and Alfred E. Kahn

Among Alfred E. “Fred” Kahn's many accomplishments, none is better remembered than his pivotal role in deregulation of the US airline industry. Kahn's commitment to marry core microeconomic principles with institutional analysis, willingness as Chairman of the Civil Aeronautics Board to step outside the “regulation as usual box,” and appealing wit made him the face of the Airline Deregulation Act of 1978, one of the great microeconomic policy triumphs. Lessons drawn from Kahn's work and the airline deregulation experience remain instructive for current academic research and regulatory policy design across broad sectors of the economy.

The impact of online lecture recordings on student performance

<span>The use of online lecture recordings as a supplement to physical lectures is an increasingly popular tool at many universities. This paper combines survey data with student record data for students in a </span><em>Microeconomics Principles</em><span> class to examine the relative effects of lecture attendance and online lecture recordings. The main finding is that students using the online lectures as a substitute for attending lectures are ultimately at a fairly severe disadvantage in terms of their final marks. Moreover, students attending few face to face lectures do not close this gap by viewing more lectures online. In contrast to this, students who attend the majority of lectures in person do receive a benefit from additional use of the lecture recordings. The results provide empirical evidence that, when used as a complementary tool, lecture recordings are a valuable supplement for students. However, when used as a substitute to attending lectures, lecture recordings provide no additional benefit.</span>

Text and anti-text in teaching the economics of the firm

How can an instructor facilitate a critical examination of the theory of the firm found in mainstream microeconomics principles texts? We suggest not presenting a single alternative paradigm, where students might feel constrained to choose one over the other, but rather an 'anti-text' that shows a variety of different critical perspectives. The limitations as well as the ideology of the mainstream texts are revealed both by what they say and what they don't, by the evidence that is ignored and by the myths that are perpetuated. Attempts by firms to influence consumer demand and the legal, regulatory and political environment are off limits for mainstream texts; in addition firms such as non-profits and cooperatives are ignored. The focus is on the mythical perfectly competitive firm with 'u'-shaped costs, constricting it to remain a small, powerless, price-taking entity.

Student Performance in Undergraduate Economics Courses

Using undergraduate student records from six large public universities from 1990 to 2003, the authors analyze the characteristics and performance of students by major in two economics courses: Principles of Microeconomics and Intermediate Microeconomics. This article documents important differences across students by major in the principles course and compares these students to those who graduate with a major in economics. The data indicate that about two thirds of students who graduate with a major in economics declared their major sometime after completing the Principles of Microeconomics course. The article documents differences in characteristics and performance for economics graduates who started as engineering, math, or physics majors as compared to business or economics majors. The authors also examine whether starting in one of the more math-intensive majors of engineering, math, or physics improves student performance in intermediate microeconomics if performance in the principles course was good.

Recognising and Building on Freshman Students’ Prior Knowledge of Economics

The results of three surveys of freshman economics students (2008-2010) at the Waikato Management School, New Zealand, suggest that incoming students have significant levels of prior economics knowledge. Given this head start in knowledge, we have expanded our freshman lecture material with more advanced content than students would normally encounter in a microeconomics principles class. This paper examines the sources of incoming students’ prior economics knowledge and discusses some of the changes made to the learning material. The changes principally relate to the links we make between students’ basic, prior economics knowledge and the more advanced learning content that demonstrates how formal economics training can add considerable value in thinking more deeply about current affairs, business issues and daily life experiences.

Market Power and the Lerner Index: A Classroom Experiment

We describe a classroom experiment that illustrates the concepts of market power and the Lerner Index. Students are organized in groups, each making a decision for a monopolist. Monopolists face different (unknown) demand curves, each with a different (constant) elasticity. Through repetition, students discover the profit maximizing solution and find that different monopolies have different mark-ups. The experimenter then reveals the unknown demand curves and illustrates how different elasticities are graphically and numerically connected to mark-ups and the Lerner index. The experiment can be used in a wide variety of courses including principles of economics, intermediate microeconomics, industrial organization, international trade, managerial economics and MBA classes. The experimental design is flexible: it can accommodate different class sizes (ranging from 10 to 100+ students) as well as different demand parameterizations. Finally, to reinforce the economic concept of profit maximization (MR=MC) in this setting, we also suggest and describe the implementation of an exercise based on the experimental design.

Using prior knowledge, scaffolding, and modelling to teach lessons in economics: three examples from across the curriculum

Students often become frustrated with learning economics not because the economics is too hard, but because they try to grasp the economic device, model, or tool being used at the same time they try to understand the economic theory the device is designed to illuminate. As a result, the tool that should aid economic understanding frequently backfires. This paper links three pertinent concepts from the education literature – prior knowledge, scaffolding, and modelling – to teaching economics. After explaining each concept, we supply three strategies designed to leverage each concept for maximum impact. Our examples come from across the curriculum: intermediate macroeconomics, principles of microeconomics and econometrics. We hope that readers will use our ideas and consider further ways of leveraging each concept.

Redesigning managerial economics to suit the MBA

Managerial economics, which seeks to use microeconomic principles to solve managerial problems, has become firmly established in business curricula, particularly at the MBA level. Surveys of MBA directors and MBA alumni, however, have indicated that managerial economics tends to be an unpopular course among students. This paper examines the criticisms and makes recommendations for new directions in the curriculum.

Tailoring Managerial Economics to Suit the MBA

Managerial economics, which seeks to use microeconomic principles to solve managerial problems, has become firmly established in business curricula, particularly at the MBA level. Surveys of MBA directors and MBA alumni, however, have indicated that managerial economics tends to be an unpopular course among students. This paper examines the criticisms and makes recommendations for new directions in the curriculum.

The Impact of Microeconomics: The Puzzle Game on Student Evaluations

IntroductionThe use of supplements in academic classrooms is widespread. This paper isdifferent in that it tests whether or not course and instructor evaluations improve as aresult of the use of a new supplement, Microeconomics: The Puzzle Game(Lipscomb and Ostapski 2008), which utilizes crossword puzzles as tools toreinforce basic economic concepts. More importantly, this paper suggests thatregression at the mean does not provide the full picture with respect to theimpact of the use of supplemental materials on course and instructor evaluations.In fact, regression at the mean suggests that course and instructor evaluationssignificantly decrease when the crossword puzzle supplement is used. However,using the power of quantile regression, we stumble upon an interesting finding—that course and instructor evaluationsincrease as a result of the crossword puzzlesupplement in the upper quantiles of the course and instructor evaluationdistribution.The data used for this analysis come from the records of the author’s ECON 2106classes (Principles of Microeconomics), spanning seven semesters (Fall 2005 to Fall2008) and using the same primary textbook. Microeconomics: The Puzzle Game wasused for the first time in the Spring 2008 semester. So, of the 602 observations in thedataset, 185 (or 30.7%) used the supplement in their classes.To estimate the impact of the supplement on course and instructor evaluations, atleast three different ways to examine the data come to mind. First, to establish abaseline, we estimate two OLS regression models where the dependent variables arecourse evaluations (COURSE) and instructor evaluations (INSTRUCT). Indepen-dent variables used to explain variation in evaluations are a student’s average gradeon four class examinations (EXAMAVG) and whether or not Microeconomics: The

Market Power and the Lerner Index: A Classroom Experiment

We describe a classroom experiment that illustrates the concepts of market power and the Lerner Index. Students are organized in groups, each making a decision for a monopolist. Monopolists face different (unknown) demand curves, each with a different (constant) elasticity. Through repetition, students discover the profit maximizing solution and find that different monopolies have different mark-ups. The experimenter then reveals the unknown demand curves and illustrates how different elasticities are graphically and numerically connected to mark-ups and the Lerner index. The experiment can be used in a wide variety of courses including principles of economics, intermediate microeconomics, industrial organization, international trade, managerial economics and MBA classes. The experimental design is flexible: it can accommodate different class sizes (ranging from 10 to 100 students) as well as different demand parameterizations.

Using Prior Knowledge, Scaffolding, and Modeling to Drive Home Lessons in Economics: Three Examples from Across the Curriculum

Students often become frustrated with learning economics not because the economics is too hard, but because they try to grasp the economic device, model, or tool being used at the same time they try to understand the economic theory the device is designed to illuminate. As a result, the tool that should aid economic understanding frequently backfires. This paper links three pertinent concepts from the education literature – prior knowledge, scaffolding, and modelling – to teaching economics. After explaining each concept, we supply three strategies designed to leverage each concept for maximum impact. Our examples come from across the curriculum: intermediate macroeconomics, principles of microeconomics and econometrics. We hope that readers will use our ideas and consider further ways of leveraging each concept.

Factors Affecting Students Grades In Principles Of Economics

Factors affecting students grades in principles of microeconomics and macroeconomics students are analyzed from the data collected in two public universities. Results indicate that gender, number of hours worked, SAT scores, number of missed classes, recommending the course to a friend, instructors, being a junior, number of economics courses taken, course, and interest in the course, were significant factors contributing to learning and success as measured by grades. Moreover, GPA, age, staying in university housing, number of mathematics classes taken, instructors use of graphs to explain a topic, being a fourth year student, enrolling for a class because of the reputation of an instructor had positive effect on students grades, while the effect of the number of hours per week spent on studying for the class was negative.

Homework, Practice, and Performance in Principles of Microeconomics

This paper contributes to the growing literature examining how students' grades on in-class exams are affected by their scores on out-of-class homework assignments. Our major finding, that exam grades and homework scores are positively related, is what educators might have anticipated, yet surprisingly there is little published research that has documented a link between student learning and out-of-class exercises. Our study's results justify the suggestions of Grove and Wasserman (2006) and Hansen, Salemi, and Siegfried (2002) that principles students be given more opportunity to practice economic analysis.

An Austrian Foundation for Microeconomic Principles

Teaching Microeconomic Principles well, a blend of good pedagogy and good economics, is the professional obligation of many economists. Since such courses are conventionally grounded in neoclassical theory, professors who embrace the theoretical perspective of the Austrian School may seem to confront a dilemma unfamiliar to other teachers: Teach the course well, or teach good economics? The thesis of this paper is, simply, that there is no such conflict. Incorporating properly chosen attributes of Austrian theory makes one’s Microeconomic Principles course better. This conclusion would be rejected by those who identify Austrian economics as adding complex disequilibrium propositions to an equilibrium analysis indistinguishable from that of neoclassical theory, or who think it dismisses equilibrium entirely, but both positions misunderstand the School’s nature. Among Austrian theoretical attributes that enrich a Microeconomic Principles course are methodological individualism, ordinal subjective utility and cost, future orientation, entrepreneurship, a process view of competition, and consideration for market participants’ knowledge. In this paper these characteristics—many ostensibly shared, but not consistently respected, by neoclassical theory—are applied by developing conventional smooth supply and demand curves, and their interaction in markets, from individuals’ value comparisons of discrete units. The paper concludes that an Austrian foundation is simultaneously more theoretically accurate and closer to the student’s everyday life, a combination that means a better Principles course.

Computer Aided Instruction: A Study Of Student Evaluations And Academic Performance

Computer aided instruction (CAI) encompasses a broad range of computer technologies that supplement the classroom learning environment and can dramatically increase a student’s access to information. Criticism of CAI generally focuses on two issues: it lacks an adequate foundation in educational theory and the software is difficult to implement and use. This paper describes the educational use of CAI in two different courses at a small, private university and the implementation and use experiences of the instructors. One instructor used Homework Manager in Principles of Financial Accounting and the other instructor used Aplia in Principles of Microeconomics. It is shown that the use of CAI is pedagogically effective and that currently available applications are easy to integrate into the student’s in-class experience. The paper also reports on the impact that using CAI has on student evaluations of both the course and the instructor and on student grades. For student evaluations, mean responses were compared on ten questions believed to be influenced by the switch from traditional homework assignments to CAI-based homework assignments. While differences were generally in the expected direction, it could not be shown that CAI had a direct impact on student evaluations of either the course or the instructor. For student grades, final exam grades were compared before and after the adoption of CAI. It is shown that the use of CAI significantly increased student final exam grades.

Don't worry about micro: an easy guide to understanding the principles of microeconomics

An Introduction to Economics and this Book.- An Introduction to Economics and this Book.- Consumer Theory.- Supply and Demand.- Rational Consumer Choice.- Decomposition of Quantity Demanded.- The Firm and Factor Input Markets.- The Firm and Production.- Labour and Capital.- Cost Analysis.- Market Structure and Game Theory.- An Introduction to Market Structure.- Perfect Competition.- The Monopoly.- Game Theory.- Oligopoly Competition.

Special Series on Behavioral Economics in Applied Behavior Analysis

Many reinforcement‐based programs may be viewed as economic systems in which the interaction between spending (responses emitted) and consumption (reinforcers obtained) is dependent on changes in price (schedule requirements). Behavioral economics refers to the subfield of behavior analysis in which responding is viewed as an interaction between price and consumption (Allison, 1983). In the behavioral economic literature, principles of microeconomics (i.e., the study of the behavior of individual consumers) are used to interpret responding under various experimental constraints. Although economic principles are commonly utilized in the experimental analysis of behavior, such analyses have only recently been presented in the applied literature. Thus, JABA invites authors to submit manuscripts for a special series on Behavioral Economics in Applied Behavior Analysis. Manuscripts are sought that incorporate economic analyses in the characterization or analysis of data (e.g., unit price, demand curves) as well as variables that influence response allocation during reinforcement‐based programs (e.g., substitutability of reinforcers). Authors are invited to submit manuscripts to the Editor, Cathleen Piazza (JABA@unmc.edu), adhering to the standard requirements for submission (http:seab.envmed.rochester.edujabainsidejaba.html) and the guidelines for the categories of articles acommon to JABA. Manuscripts should also include a cover letter requesting that the submission be considered for publication in the special series. The guest associate editors for this issue will be Henry Roane (hroane@unmc.edu), William Ahearn (bahearn@necc.org), and Iser DeLeon (deleon@kennedykrieger.org).