1. Graph Review (three or four students)
A review of the Cartesian coordinate system, positive and negative slope, increasing and decreasing slope, zero and infinite slope. Students might use one student as the x axis, one as the y axis and a third as the slope. A little gymnastics training in your background wouldn’t hurt for this one.
2. Business Interview: Elasticity of Demand: Can be done by one or several persons.
The purpose of this
exercise is to give students a sense of how the elasticity of demand works in
the real world. Interview a local business owner or manager. What is their main
product? What is the price they charge? If they were to increase prices by 10%,
what would happen to the quantity demanded in the short run? Calculate the
short run price elasticity of demand. Would things be different in the long
run? What specific factors influence demand for this product (advertising,
weather….). Read chapter 5 first.
3. Marginal Rate of Substitution Experiment: This requires at least two persons.
The purpose is to demonstrate the declining marginal utility of consuming more and more of one good, all else equal, to show that the rational consumer will always seek to get the greatest marginal utility per dollar, and to explain why the ratio of marginal utilities to prices will approach equality in long-run equilibrium. For obvious reasons, it’s helpful if the persons doing this have read and fully understand the text. They must bring their own popcorn and Coke. One person eats or drinks and reports the marginal utility experienced. The other person records this on the blackboard and explains what is going on to the group. The eater-drinker (Rational Economic Person) begins by eating handfuls of popcorn, rating each handful for the amount of utility experienced (on a scale from 1-10, where 10=macimum utility). After the principle of diminishing marginal utility is demonstrated, the second phase begins, in which both Coke and money enter the picture as well. The Eater-drinker now has to pay money for every sip of coke or handful of popcorn (set your own prices). Here the point should be to demonstrate that Rational Economic Persons try to get as much pleasure as possible for the money, and will spend money on Coke rather than popcorn as long as the ratio of marginal utility to price is greater for Coke. Eventually, however, this ratio declines, and they will buy popcorn instead, etc.
4. Business Interview: Costs of Production: Can be done by one or several persons.
The purpose of this exercise is to help students understand the difference between fixed and variable costs; and between total, average, and marginal costs. Interview a local business owner or manager. Ask them what their costs of production are, and try to get actual, if approximate figures for several categories of fixed and variable costs. Is the firm operating at maximum efficiency, or could it lower its average costs by expanding the scale of its operations? Read Chapter 21 first so you will know what you are doing. And try to pick an example that will be interesting to the class.
5. Paper Airplane Production (Assembly Line Production): Requires a group of about 5 participants.
The purpose of this
exercise is to demonstrate the principle of diminishing marginal physical
productivity of labor in the short run. Choose your plant and equipment: a
table and chairs. The production space must be limited (the more limited it is,
the faster the declining marginal productivity of labor will set in). You may
not use scissors or knives. Scrap paper is your raw material. Your final
product is paper airplanes. These must be able to fly at least 6 ft. One
person, the manager, is not allowed to actually build planes. Their task is to
monitor and record the number of workers and the output of planes per 30
seconds. Begin production with one worker, then add more. Calculate the
marginal physical product of labor (same as marginal returns), as in figure 7.3
of the text. Note: this will not work unless you design it so that there is,
eventually, overcrowding in your production space that lowers product per
worker. Conclude with some discussion of the point at which declining marginal
productivity became apparent.
6. Business Interview: Competition: Can be done by one or several persons.
This interview is a bit
less specific that the ones above. Ask a local person owner or manager about
the nature competition in their industry. How easy is it for few firms to
enter? How high are profit rates, compared to those in the economy as a whole? What
kinds of factors (such as technological change ) are affecting the degree of
competition in the industry? Is there competition for producers overseas, or
not? What kinds of strategies are firms pursuing in order to stay
competitive—cutting prices, increasing promotion and advertising, lower costs?
Try to pick an interesting example and feel free to add in some history and
background.
7. Microsoft vs. the U.S. Department of Justice: At least two people.
The most celebrated anti-trust case of the last year was the U.S. Department of Justice suit against Microsoft. Some aspects of the case will be covered in class, but it would be interesting to explore it in more detail. Stage a debate, with one person representing the Department of Justice, another representing Microsoft. In order to find additional details, check out the following website:
http://www.essentialinformation.org/features/msfinalorder.html
8. The Taste Test: At least two people
Can Green Mountain students tell the difference between Coke Pepsi, and a generic cola?
Design a “blind” taste test for the class. This requires some modest expenditures and advance planning. All colas should be in unidentifiable paper cups, at room temperature. No spitting allowed. Be sure to collect and record the data, and use it to reflect on the true meaning of the large amounts of money spent advertising brand names.
9. Musical Chairs : Requires a group of about 6 participants.
A tape player or some other source of music is required. One person in the group operates the tape player. I recommend using Tracy Chapman’s song Sub City but any other song with a kind of economic them is OK. This is an exercise in seeing how the unemployment rate works, and what the difference is between unemployment and dropping out of the labor force. Set up five chairs (or n-1 chairs, where n = number of people). Start the music, and circle the chairs until the music stops. Those who get chairs are considered employed. Ask the person who didn’t get a chair if they still want to play. If they say yes, they are unemployed. If they decide to sit down, they are considered “discouraged workers” and have left the labor force. Recalculate the unemployment rate. Remove another chair, play the game again, etc. Reflect on how the ratio of people to chairs affects the effort that players must put in if they want to succeed.
10. The Nike Boycott: Good or Bad? One or more people.
One issue raised by globalization is working conditions in factories overseas. This last year, a great deal of public pressure was brought to bear on Nike, and, in response, Nike imposed some conditions that its shoe suppliers must meet (such as, paying the required minimum wage in the country of operation). Is this a good idea, or not? In order to prepare yourself for a debate, you can check the following websites.
Pro-Nike: http://heinonline.org/HOL/LandingPage?collection=journals&handle=hein.journals/ialrr61&div=4&id=&page= (you’ll have to find this journal article through inter-library loan.)
Anti-Nike: http://www.oxfam.org.au/explore/workers-rights/nike
11. Public Assistance in Vermont: How does it compare with other states? One or more people.
We will devote some attention in class to the welfore reform implemented in 1996, which replaced AFDC with TANF. One of the biggest effects of the reform was to give individual states much more decision-making power. State policies are changing fairly rapidly. You can do research on the web to find out some of the details of Vermont policy and give a brief report. Try looking at http://www.welfareinfo.org and http://www.acf.dhhs.gov.