Tuesday, June 24, 2008

Principles of microeconomics

I just finished teaching this as a summer school course at George Mason, my first time teaching. I had no idea what to expect, but I'm happy to report that I really enjoyed it. My students were fantastic. We covered 15 of the 16 chapters in Gwartney and Stroup's Microeconomics, an excellent introduction to the subject.

Here are some of the questions I asked on the final, and for which most students gave very good answers:

1) Why are wages lower for women on average?
Answer: Specialization in the household.

2) Is the lottery fair? Explain using the difference between procedural justice and social, or redistributive, justice.
Answer: It's voluntary so it's procedurally just, but it widens income inequality so it's not socially just. See Hayek's "Atavism of Social Justice" in New Studies. (Do you think voters and pols get this distinction?)

3) Why are gas prices so high?
Answer: Many reasons, including supply constraints from OPEC and Congress, inelastic demand, and government subsidies.

4) Why do theaters offer discounts to students and the elderly?
Answer: Price discrimination.

I also wanted to ask a question about the difference between inequality and diversity, but we didn't spend enough time on that.

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