Nov 09 2009

## A Micro problem for the advanced Econ student

Greg Mankiws Blog: Take Out Your Pencils

I love that Harvard Economics professor Gregory Mankiw blogs, but I hate that has de-activated the comments on his blog. Yesterday he posted a question from his own Harvard introductory economics class.  Since he doesn’t allow comments though, I cannot tell if I’m solving it correctly. So I will re-publish it here and ask my readers to solve the problem in the comment section.

IB and AP students who have studied microeconomic should be able to put some of their basic algebra skills to work to solve this one.

Only one firm produces and sells soccer balls in the country of Wiknam, and as the story begins, international trade in soccer balls is prohibited. The following equations describe the monopolist’s demand, marginal revenue, total cost, and marginal cost:

Demand: P = 10 – Q
Marginal Revenue: MR = 10 – 2Q
Total Cost: TC = 3 + Q + 0.5 Q^2
Marginal Cost: MC = 1 + Q

where Q is quantity and P is the price measured in Wiknamian dollars.

a. How many soccer balls does the monopolist produce? At what price are they sold? What is the monopolist’s profit?

b. One day, the King of Wiknam decrees that henceforth there will be free trade—either imports or exports— of soccer balls at the world price of \$6. The firm is now a price taker. What happens to domestic production of soccer balls? To domestic consumption? Does Wiknam export or import soccer balls?

c. In our analysis of international trade in Chapter 9, a country becomes an exporter when the price without trade is below the world price and an importer when the price without trade is above the world price. Does that conclusion hold in your answers to parts (a) and (b)? Explain.

d. Suppose that the world price was not \$6 but, instead, happened to be exactly the same as the domestic price without trade as determined in part (a). Would anything have changed when trade was permitted? Explain.

Post your solutions below, I really want to know if I have solved it correctly!

Nov 07 2009

• China and the US have a complicated relationship when it comes to trade. It may be changing in the future due to the recession in America, but for some that change can’t come fast enough!

Posted from Diigo. The rest of my favorite links are here.

Nov 06 2009

• Mr. Clifford and ACDC Leadership is dedicated to creating interactive programs, lessons, and activities that make learning exciting.

• Are you looking for a great opportunity, a rewarding career, or the chance to make a difference? KC Distance Learning is hiring NCLB Highly Qualified High School certificated teachers to fill positions across the country. We currently have part-time and full-time positions available for qualified teachers who want to work from their home.  Working at KCDL you will enjoy a flexible work environment, utilize the latest distance learning and communications technology, and, best of all, you can help students from all walks of life achieve their individual potential.

Posted from Diigo. The rest of my favorite links are here.

Nov 05 2009

## New tools for the Econ teacher and student: Social bookmarking Site, iPhone App and YouTube Review Videos

I’ve recently added two new great tools for Econ teachers to this blog that I think can really benefit teachers who decide to use them. Both of the following resources can be found in the sidebar to the right of this blog.

First, I have created a Diigo Group for Econ Teachers that is open for anyone to join. A Diigo group essentially is a social network for people with shared interests. The Econ Teacher group will be a place where Econ teachers can share bookmarks to online resources for use in the classroom. More than just a bookmarking site, however, Diigo allows users to annotate, highlight and leave sticky notes on articles, blogs, and other websites posted to the group, which can then be seen by group members, and further annotated. A website such as the CIA World Factbook, the BLS, or BEA, or an article from the Financial Times or Wall Street Journal thus becomes a shared document for discussion and reflection amongst any and all teachers who find it useful.

Diigo groups also have discussion forum features, so the Econ Teacher Group will become a forum for sharing collective research and resource ideas, as well as a forum for discussing how technology and the web can be used to enrich economics education. Join the Econ Teacher Diigo Group now to help grow this new social network for Econ teachers! (Once you’ve joined Diigo, I recommend adding the Diigo toolbar to your browser to make bookmarking and annotating sites to the group easy!)

Secondly, I am happy to endorse my friend and colleague Mike Fladien’s entrepreneurial endeavor aimed at helping high school Economics students prepare for their exams, “EconExamCram”. EconExamCram is an iPhone or iTouch App for sale in the iTunes store for \$1.99. From the app’s description:

This app is available for download on iTunes. I intended this to aid students in preparing for tests in microeconomics. It’s a comprehensive review of 80% of the concepts covered in a micro class.

I believe that students today want to learn using today’s technology. Today’s technology is iPods, Smart Boards, audience response systems, flash animation and more. When I developed this app, I developed it for the on-the-go student who values appearance too. The student I envisioned was one who had a challenging schedule and one or more after school activities. They will carry an iPod with them, but not a five pound textbook. The student I envisioned was one who studied in “micro sessions” of 10 or 15 minutes. The touch was a natural tool for these students.

Congratulations to Mike on developing this app and making it available to us and our students to help prepare for the AP and IB Exams. Do your kids a favor and give them all the link to this app so they can start reviewing for your tests on their phones today!

The last great resource I have added to my sidebar this week is an RSS feed to a YouTube channel I’ve recently discovered. Jacob Clifford, an AP Economics teacher in San Diego, has recently begun producing and publishing a series of review videos for the AP Economics student. He calls them “Economic Concepts in 60 Seconds”.

Jacob is an enthusiastic, energetic young Econ teacher whose lecture style is fast paced and easy to follow. An since the lectures are on YouTube, students (and teachers!) can watch them over and over until his explanations of econ concepts is clear. In each video, he illustrates the concepts on a whiteboard while clearly (and quickly) explaining them in a fun and entertaining way. So far he has only produced videos up through perfect competition in the AP Micro course, but he promises to keep adding more throughout the school year.

You’ll be able to follow Jacob’s latest video posts by checking the RSS feed on my sidebar when visiting the blog. I’m hoping to team up with Jacob somehow in the future to get his videos a wider audience through this blog or in some other collaborative way.

Nov 05 2009

## Kids on the Economy

I love this! Marketplace Public Radio convened a “Small Townhall” with eight middle school aged kids to ask them questions about the economy. The idea is that the economic decisions made by today’s business leaders, policymakers, academics and grown-ups in general will have huge effects on today’s youth when they grow up, so why not ask them what they think of the big economic issues today? In my own classes, I often refer to the US national debt as a “teenager tax” since it will ultimately be paid back through higher taxes by income earners in the future. Well, these kids are those future income earners.

The questions the kids are asked:

1. Should kids be allowed to have credit cards?
2. Do you know what the recession is?
3. What is the deficit?
4. Has the recession changed your dreams?
5. What do you think about debt?
6. Do you have any investment advice?
7. What do you think about saving money?

My favorite is the kid’s explanation of the current recession. If one of my 18 year old year two IB Economics students could explain the recession as well as this 12 year old, I’d be one proud teacher!

Comments Off on Kids on the Economy

• ## Order Welker’s books

for IB Economics

for AP Macro