The author presents new evidence on the effects of attendance on academic performance. He used a large panel data set for introductory microeconomics students to explicitly take into account the effect of unobservable factors correlated with attendance, such as ability, effort, and motivation. He found that neither proxy variables nor instrumental…

As professional athletes are traded from team to team, various in-kind and monetary transactions for certain jersey numbers are becoming more common. Given the size of some of the recent payments, these stories have transitioned from relative obscurity to mainstream sports news. In this article, the authors provide two areas where these kinds of…

Most people learn to drive without knowing how the engine works. In a similar vein, the author believes that students can learn economics without knowing the algebra and calculus underlying the results. If instructors follow the philosophy of other economics courses in using graphs to illustrate the results, and draw the graphs accurately, then…

In recent years, interest has been growing in policy applications of different auction systems. This paper reports a series of experiments that were used to design and implement an auction in a unique policymaking environment. In April 2000, the Georgia legislature passed a law that mandated that the state hold an auction in drought years to pay…

In the United States, evidence abounds on the effects of expenditures and class size on student achievement, but often it is controversial. In other parts of the world, hard evidence is not as easy to come by, mostly because of data limitations. But over the years, testing agencies have started to collect data on student performance and family…

Comparison of a contemporary public finance textbook with one written in the 1940s indicates the following major changes in the field: microeconomic theory is now the framework for analyzing positive and normative issues; research is dominated by econometrics; and topical coverage has changed along with changes in public policy. (JOW)

Describes bargaining examples that use expected utility theory. Provides example results that are intuitive, shown graphically and algebraically, and offer upper-level student samples that illustrate the usefulness of the expected utility theory. (JEH)

Describes and contrasts nonlinear and linear pricing in consumer choice theory. Discusses the types of nonlinear pricing: block-declining tariff, two-part tariff, three-part tariff, and quality discounts or premia. States that understanding nonlinear pricing enhances student comprehension of consumer choice theory. Suggests teaching the concept in…

Examines key public members' perceptions of the personal, professional, and community relationships they have with a bank and relates those perceptions to evaluations of satisfaction. Finds members' perceptions of their personal and professional relationships significantly influence evaluations of overall satisfaction. Discusses implications for…

Fifty years ago what was taught in the principles of economics course reflected reasonably well what economists did in their research. That, however, is no longer the case; today what economists teach has a more nuanced relation to what they do. The reason is that the economics profession and the textbooks have evolved differently. The author…

The author describes a classroom game demonstrating the process of adjustment to long-run equilibrium in a market consisting of price-taking firms. This game unites and extends key insights from several simpler games in a framework more consistent with the standard textbook model of a competitive industry. Because firms have increasing marginal…

Many introductory microeconomics textbook authors derive the law of demand from the assumption of diminishing marginal utility. Authors of intermediate and graduate textbooks derive demand from diminishing marginal rate of substitution and ordinal preferences. These approaches are not interchangeable; diminishing marginal utility for all goods is…

Knowledge of economics is important for individuals to function effectively as citizens in an increasingly connected world economy. Economic literacy includes understanding how economies and markets work, what the benefits and costs of economic interaction and interdependence are, and that people have to make choices because resources are…

Instructors can use a computerized experiment to introduce students to imperfect competition in courses on introductory economics, industrial organization, game theory, and strategy and management. In addition to introducing students to strategic thinking in general, the experiment serves to demonstrate that profits of a firm fall as the number of…

States that short-run production theory and U-shaped cost curves do not conform to industrial reality. Explores in detail the reality of manufacturing stating that fixed proportions seem more suited to describing short-run manufacturing processes. Addresses fixed proportions in short-run production and short-run cost functions. Includes…