10.9.05

ECONOMICS FOR EVERYBODY. Cornell's Robert Frank has a New York Times column questioning the effectiveness of introductory college economics.

Another problem is that the introductory course is increasingly tailored not for the majority of students for whom it will be their only economics course, but for the negligible fraction who will go on to become professional economists. Such courses focus on the mathematical models that have become the cornerstone of modern economic theory. These models prove daunting for many students and leave them little time and energy to focus on how basic economic principles help explain everyday behavior.

But there is an even more troubling explanation for students' failure to learn fundamental economic concepts. It is that many of their professors may have only a tenuous grasp of these concepts, since they, too, took encyclopedic introductory courses, followed by advanced courses that were even more technical.

There's something to this gripe. We have asked a variant of the following question of graduate students on qualifying exams. "A perfectly competitive industry operating under conditions of constant returns to scale experiences a permanent increase in demand. What are the long-run and short-run effects on equilibrium price." The answers are pretty dismal. Perhaps I haven't done as good a job as I might in presenting the Jacob Viner article from which all else follows. Or perhaps our students concentrate on the Hessians and Lagrangians rather than honing their intuition.

The column includes an opportunity cost quiz that stumped most of the economists who tackled it. William J. Polley has a roundup of commentary on the column and some thinking about the quiz.

It would be useful, for example, for students completing their first economics course, to be able to answer the following question. "Suppose an economics department and a fire department show up at a volunteer center for flood relief. The center director wants some leaflets handed out in the flood zone. Do the economists or the firefighters get the leafletting task? Explain your answer."

I suspect that if more people understood the comparative advantage argument behind that question, they'd be more upset with this.

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