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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 introductoryeconomics leave the course without reallyhaving learned even the most importantbasic economic principles.

Their ability to answer simple economicquestions several months after leaving thecourse is not measurably different fromthat of people who never took a principles

course.*

*Hansen, W. L., M. K. Salemi, and J. J. Siegfried. 2002. Use It orLose It: Teaching Economic Literacy.American EconomicReview (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 anactivity is the value of everything you mustsacrifice to engage in it.

Opportunity Cost

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Do students learn the opportunity cost conceptsuccessfully?

Do Economists Recognize an OpportunityCost When They See One? A DismalPerformance from the Dismal Science,

Paul J. Ferraro and Laura O. Taylor

Georgia State University

Please Circle the Best Answer to theFollowing Question:

You won a free ticket to see an Eric Claptonconcert (which has no resale value).

Bob Dylan is performing on the same night andis 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 performerand there are no other costs than the onesmentioned.

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You are willing to pay as much as $50 tosee Dylan

The cost of Dylan ticket = $40

Based on this information, what is theopportunity cost of seeing Eric Clapton?

a. $0

b. $10

c. $40

d. $50

Correct answer = b. $10

7.4 percent of 270 undergraduates who hadpreviously taken a course in economicsanswered this question correctly.

17.2 percent of 88 undergraduates who had

never taken a course in economicsanswered the question correctly.

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Of 199 PhD economists and graduate

students who answered the question atthe 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 tobe 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) shouldtake an action if, and only if, the extrabenefits from taking the action are at leastas great as the extra costs.

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Example 1You are about to buy a$20 alarm clock at thecampus store when afriend tells you that K-mart has the samealarm clock on sale for

$10.Do you drivedown to K-mart?

Example 2. You are about to buy a $2510laptop computer from the campus storewhen a friend tells you that K-mart has the

same computer on sale for $2500.

Do you drive downto 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 canbe used on either of two upcoming trips:

Save $90 on your $200 round-trip ticket toChicago

or

Save $100 on your $2000 round-trip ticket toTokyo.

For which trip should you use the coupon?

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Why do the keypad buttons on drive-upautomatic teller machines have Braille dots?

Bil l Tjoa

The Economic Naturalist Writing Assignment

Knowing biology makes it possible to discernadditional pattern and texture in naturalenvironments.

Why, in most species, are males biggerand 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 holdsthat human beings have a universalpredisposition to 'story' their experience,that is, to impose a narrative interpretationon information and experience.

Narrative and learning to teach: implications for teacher- educationcurriculum, Walter Doyle and Kathy Carter

http://faculty.ed.uiuc.edu/westbury/JCS/Vol35/DOYLE.HTM

[children] turn things into stories, andwhen they try to make sense of their lifethey use the storied version of theirexperience as the basis for furtherreflection.

If they don't catch something in a narrativestructure, it doesn't get remembered verywell, and it doesn't seem to be accessible

for further kinds of mulling over.

Jerome 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 beplausible.

Why do brides spend somuch money onwedding dresses, whilegrooms often rent cheaptuxedos, even thoughgrooms could potentiallywear their tuxedos onmany other occasions

and brides will neverwear their dressesagain?

Jennifer Dulski

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Why are childsafety seats

required incars but not inairplanes?Greg Balet

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Why are round-trip fares from Hawaii to themainland 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 whilea $20,000 car rents for$40 a day?

Jon Gotte

Why do manyfast foodrestaurants postsigns like this?Sam Tingleff

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Why dofemalemodels earnso muchmore thanmalemodels?

FranAdams

Why do airlines charge much more for ticketspurchased 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 sucha great deal formen, why dopredominantlymale legislaturesenact statutesprohibiting it?

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Adam Smithsinvisible hand:

Self-interesteddemands will resultin a sociallyefficient allocation.

Charles Darwin: Traitsare selected becauseof their impact on thereproductive fitness ofindividuals, not groups.

Traits that benefitindividuals often work

to the disadvantageof 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 continueto serve regularly any point named hereinthrough the airport last regularly used by theholder to serve such point prior to the effectivedate of the certificate. Upon compliance withsuch procedures relating thereto as may be

prescribed by the Board, the holder may, inaddition to the services hereinabove expresslyprescribed, regularly serve a point namedherein through any airport convenient thereto.

Bureaucratic Language

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I propose to embrace tactical strategies inmoving in disruption of the dichotomy, ascrucial to an epistemology ofresistance/liberation. To do so is to giveuptake to the disaggregation of collectivityconcomitant with social fragmentation andto theorize the navigation of its perilswithout 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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