Adding to a High School Economics Course
I teach an AP economics course, that covers both micro and macro. I do not much care for the AP curriculum, so I try to do things differently. Here are some thoughts, below the fold, on material that I plan to include in the beginning of the course Some of it I include already, and I have decided that other material on economic history needs more emphasis. Thanks to people who commented on my “bleg” for thoughts on economic history.
Another topic that I like to emphasize is price discrimination, but that comes later in the course.A. Some Foundational Exercises
1. Rent vs. Buy calculations
I like to start out with this. It establishes that there is an element of economics that is about calculation. It teaches some personal finance. It allows me to introduce the economic concept of capital. (Remember that before you take an economics course, you think of capital as something to do with “having money.”) It allows me to introduce the interest rate.
2. Starting a business
A well-known flaw in economics courses is that they do not stress entrepreneurship. I try to remedy this by asking students in groups of two or three to think about a simple business that you could set up in a strip mall or run out of your garage. I use this to introduce the concepts of opportunity cost (the entrepreneur’s time; also, I want students to understand that buying capital equipment using savings incurs an interest cost that is similar to the cost of borrowing to pay for that equipment), factors of production, and comparative advantage (by asking students which functions might be done either internally or outsourced). I also ask them what know-how is required for their business. I try to get them to think about the key factors that will determine whether the business is profitable or not. I try to get them to make an accurate assessment of which factors have the highest costs. (They often get this wrong. If it costs $500 to buy a lawnmower and $10 an hour to pay a worker to operate the lawnmower, they think that the lawnmower is the most expensive factor of production.)
3. GDP calculations.
We want to talk about the standard of living. GDP per capita is a measure of the standard of living. I want the students to understand how real GDP is derived from measures of dollar expenditures and prices. I do not get into the components of GDP at this point.
B. Some Economic History
1. The Industrial Revolution
I want to get across the profound effects of the industrial revolution, the wide variety of possible causes, the puzzle of why some countries industrialized early and others did not, and some of the impact that it had on economic thought.
Standards of Living and Modern Economic Growth, by John Nye in the Concise Encyclopedia of Economics (CEE).
Transfer of Knowledge section of Wikipedia article on the Industrial Revolution.
Causes section from Wikipedia, including causes for occurrence in Europe and causes for occurrence in Britain.
Adam Smith biography in the CEE.
Marxism, by David L. Prychitko in the CEE.
C. The Great Depression
I want students to know the historical path of unemployment during the Depression, so that they know that it remained high all the way until the war. I want them to get a sense of how economists look at causal factors. I want to show how it influenced what became Keynesian economics.
1. The Great Depression by Gene Smiley in the CEE.
2. Keynesian Economics by Alan Blinder in the CEE.
D. The Financial Crisis of 2008
My analysis is of course based on Not What They Had In Mind.