Instructor’s Manualto accompany

EconomicsNinth Edition

Stephen L. SlavinUnion County College

Mark MaierGlendale Community College

McGraw-Hill/Irwin

Cities lines

Copyright page

ii

Contents

Correlation Table ivPreface

vWhat’s New and Different in the Ninth Edition? xWhat Can Be Skipped in Macro and Micro Courses? xiiiOne-Semester Courses xivWhat Works in the Classroom? xviMore Teaching Resources xxv Chapter 1 A Brief Economic History of the United States 1 Chapter 2 Resource Utilization 7 Chapter 3 The Mixed Economy 15 Chapter 4 Supply and Demand 21 Chapter 5 The Household-Consumption Sector 28 Chapter 6 The Business-Investment Sector 35 Chapter 7 The Government Sector 42 Chapter 8 The Export-Import Sector 50 Chapter 9 Gross Domestic Product 57 Chapter 10 Economic Fluctuations, Unemployment, and Inflation 67 Chapter 11 Classical and Keynesian Economics 76 Chapter 12 Fiscal Policy and the National Debt 86 Chapter 13 Money and Banking 90 Chapter 14 The Federal Reserve and Monetary Policy 97 Chapter 15 A Century of Economic Theory 105 Chapter 16 Economic Growth and Productivity 111 Chapter 17 Demand, Supply, and Equilibrium 117 Chapter 18 The Price Elasticities of Demand and Supply 126 Chapter 19 The Theory of Consumer Behavior 136 Chapter 20 Cost 142 Chapter 21 Profit, Loss, and Perfect Competition 152 Chapter 22 Monopoly 163 Chapter 23 Monopolistic Competition 172 Chapter 24 Oligopoly 178 Chapter 25 Corporate Mergers and Antitrust 186 Chapter 26 Demand in the Factor Market 192 Chapter 27 Labor Unions 197 Chapter 28 Labor Markets and Wage Rates 202 Chapter 29 Rent, Interest, and Profit 208 Chapter 30 Income Distribution and Poverty 213 Chapter 31 International Trade 219 Chapter 32 International Finance 227Worksheets 233Solutions to Worksheets 300

iii

Correlation Table

This manual will assist instructors using Stephen Slavin’s Economics, Eighth edition. For ease of use, the majority of the manual is organized by the chapters in the text. If you are using the Macroeconomics or Microeconomics “splits,” check the correspondence below:

Economics Macroeconomics MicroeconomicsIntroduction Introduction Introduction1. A Brief Economic History of the United States

1. A Brief Economic History of the United States

1. A Brief Economic History of the United States

2. Resource Utilization 2. Resource Utilization 2. Resource Utilization3. The Mixed Economy 3. The Mixed Economy 3. The Mixed Economy4. Supply and Demand 4. Supply and Demand 4. Supply and Demand5. The Household-ConsumptionSector

5. The Household -ConsumptionSector

5. Demand, Supply, and Equilibrium

6. The Business-Investment Sector 6. The Business-Investment Sector 6. The Price Elasticities of Demand and Supply

7. The Government Sector 7. The Government Sector 7. Theory of Consumer Behavior8. The Export-Import Sector 8. The Export-Import Sector 8. Cost9. Gross Domestic Product 9. Gross Domestic Product 9. Profit, Loss, and Perfect Competition10. Economic Fluctuations, Unemployment, and Inflation

10. Economic Fluctuations, Unemployment, and Inflation

10. Monopoly

11.Classical and KeynesianEconomics

11.Classical and KeynesianEconomics

11. Monopolistic Competition

12. Fiscal Policy and the National Debt 12. Fiscal Policy and the National Debt 12. Oligopoly13. Money and Banking 13. Money and Banking 13. Corporate Mergers and Antitrust14. The Federal Reserve and Monetary Policy

14. The Federal Reserve and Monetary Policy

14. Demand in the Factor Market

15. A Century of Economic Theory 15. A Century of Economic Theory 15. Labor Unions16. Economic Growth andProductivity

16. Economic Growth andProductivity

16. Labor Markets and Wage Rates

17. Demand, Supply, and Equilibrium 17. Income Distribution and Poverty 17. Rent, Interest, and Profit18. The Price Elasticities of Demand and Supply

18. International Trade 18. Income Distribution and Poverty

19. Theory of Consumer Behavior 19. International Finance 19. International Trade20. Cost 20. International Finance21. Profit, Loss, and Perfect Competition22. Monopoly23. Monopolistic Competition24. Oligopoly25. Corporate Mergers and Antitrust26. Demand in the Factor Market27. Labor Unions28. Labor Markets and Wage Rates29. Rent, Interest, and Profit30. Income Distribution and Poverty31. International Trade32. International Finance

iv

Preface

A Different Approach: A Changing Student BodyIn general, students do not do well in economics. In colleges across the nation, half the students beginning a principles course usually end up with a D, an F, or will withdraw from the course. A great many students are not prepared to deal intelligently with economics—or indeed, with any course taught on a college level. Some are deficient in math. Some cannot read with sufficient comprehension. Many have poor empirical backgrounds. And increasingly, we are getting students in our classes who may suffer from some combination of these problems.

The trend since the early 1970s has been to water down college courses, and to write texts that cater to lower reading levels. Students are asked to read less and less. “Dumbing down” has become the order of the day, not just at the nation’s community colleges, but at nearly all four-year colleges as well. In sum, we are teaching, on the average, much less able and well-prepared students than we were 30 years ago. And consequently, those of us who have graced the halls of academia all through these years have been forced to lower our standards quite substantially.

So, we may ask, how can we cover enough economics in sufficient depth that today’s students can emerge from the principles course with the requisite knowledge and skills to go on to more advanced courses? We need to start with one basic fact. Most college students do not read. The average college student has grown up watching over four hours of television a day, and has done less than half an hour of reading even in high school. And since reading is the main source of information in a principles course, very few students learn very much.

Some authors have uncompromisingly written texts that are every bit as technical and difficult as Samuelson was in the old days—and may be even more so. I commend them for their integrity. Most others, of course, have dumbed down to accommodate so many of today’s students. Again, these authors are to be commended for their grasp of reality. But I have taken a very different approach.

Although my writing style is colloquial, I have not written on a sixth or eighth grade level. But what about the students who have poor math backgrounds or are traumatized by graphs? The needs of these students—who may be a majority in many principles courses—are completely ignored by virtually every other author. And these are the students who take up hours of class time asking about things they should have learned in middle school, let alone high school. Of course, countless others get discouraged and just drop the course.

I am the only textbook author who covers seventh and eighth grade math—e.g., calculating percentage changes, converting fractions into decimals—that is needed in both macro and micro economics. Everyone else assumes that the students already know this material. Of course they should—but they don’t.

v

Most of this math is placed in boxes labeled “Extra Help”, which the better-prepared students can skip. And I have treated graphical analysis the same way, taking a very patient, step-by-step approach to both reading graphs and drawing them. Indeed, I am one of the few authors who has the reader drawing graphs. A hands-on approach works best—especially in micro, and that, in general, an economics text should be read actively rather than passively.

The book’s first chapter, “A Brief Economic History of the United States,” places the course within an empirical context. You don’t need to be reminded how little our students know about the country they live in, its history, its political institutions, or its place in the world. Many of my students cannot name either of their state’s senators, believe that President Reagan raised taxes, and think that the first year of the nineteenth century was either 1900 or 1901.

How Slavin’s Economics can make a differenceIn some colleges, the vast majority of students do not open a book until the night before an exam. But why should they? All through elementary school, middle school, and high school, their teachers rarely gave homework and passed virtually everyone, regardless of how little they knew. So when we tell our students they must read the book before they come to class, they look at us like we’re out of our minds.

After all, none of their teachers ever asked to them to open a book. So why should they start now? In a survey of principles students at Western Connecticut State, two economics professors found that 97% of their students did not bother to read their textbook before coming to class. Ninety-seven percent!

So how can Slavin’s Economics make a difference? Obviously it can’t help students who absolutely refuse to read, and who, in my opinion, should not be in college in the first place. But it can make a very big difference to the rest of your students. The good students, the ones who will faithfully read any assigned text before coming to class, will get a lot more out of it, because, with all due modesty, it is better written than any other principles text on the market. Slavin’s Economics can also make a big difference to your marginal students—the ones who show up every day, take notes, and cram diligently for your exams. If you can just get them to start reading the text, the chances are, they’ll keep reading it on their own.

Economics texts need to be read actively rather than passively. The reader should be challenged rather than merely presented with a lot of theories, concepts, and facts. And so, within most chapters, I have the reader working out problems, filling in tables, and even drawing graphs. For example, near the beginning of Chapter 5, I have students calculating APC, APS, and then, MPC, and MPS Or, in Chapter 20 they are calculating AFC, AVC, ATC, and MC, and then drawing these curves on graph paper. And in the workbook section this work is reinforced by additional problems.

The workbook also provides the students with extensive feedback. It lets them know if they understand everything in the chapter, or whether they need to go back over some things. A student who consistently does well on the workbook questions should do well

vi

on exams, since the questions in the test bank—virtually all multiple-choice, fill-ins, or problems—are very similar to those in the workbook. But that’s not all, folks! We’ve got about 75 problem sheets in this Instructor’s Manual that can be photocopied and distributed to your students.

Let’s say that you’re going over the inflationary and recessionary gaps at the beginning of Chapter 12. What I used to do was draw a graph on the board showing either of these gaps and ask my students to tell me if it was an inflationary or recessionary gap, how much is it, what two fiscal policy measures are needed to remove it, and to calculate the multiplier. Now how much class time does this problem take up? Maybe 6 or 8 minutes?

If you distributed a couple of worksheets on the inflationary and recessionary gaps when you assigned the first 14 or 15 pages of Chapter 12, when you covered these problems at the beginning of the next class, you could save about 15 minutes of class time by just handing out the answer sheets.

Think of all the time you spend putting problems on the board or projecting them on a screen, and waiting for your students to work out the solutions. I thought I was being efficient in my micro course by arriving 10 minutes before class to put tables and graphs on the board from the homework. But I found that distributing worksheets and then answer sheets saved hours of valuable class time.

Students in the principles course learn economics by doing economics. Although they’re certainly not all voracious readers, most of them do complete tangible assignments. If you give them 15 pages of reading, most would think that they didn’t get any homework. But when you ask them to do worksheet or workbook problems, they do understand that they are expected to complete that assignment.

There are worksheets for almost every chapter and there is a workbook section following every chapter. By constantly being asked to read actively, students tend to retain more information because they are participating in the learning process. Every publisher boasts that their principles texts are interactive, but there is just one that lives up to all the hype. Only great personal modesty prevents me from disclosing its author.

You may have noticed that the text has perforated pages to enable the students to easily tear out workbook pages to be handed in. When my students know that I will be collecting workbook pages, some 90% of them do the assignment. But when I announce that I won’t be collecting anything, I find that only a handful of more conscientious students bother to do the work. So I’ve concluded that collecting workbook pages—if only occasionally—seems to have a strong influence on whether the majority of students are prepared.

A Three Track ApproachWith the exception of a few dozen elite colleges and universities, the abilities, academic backgrounds, and study habits of the student bodies at the other 4,000 institutions of higher learning are extremely varied. And so too, enrolled in every principles course we have some excellent students, a middle group of the fair to indifferent, and some students

vii

who are so lacking in background and motivation that one wonders why they are in college in the first place.

We are left with the perennial question: To whom do we pitch our course? If we aim at the middle group, we lose the students at the top and at the bottom. If we pitch our course to those at the top, we lose everyone else. And if we spend too much time trying to teach those at the bottom, we bore everyone else.

Is there an ideal way to pitch a principles course that will make everybody happy? Of course not. But Slavin’s Economics is geared to minimizing the number of students we lose along the way.

Within most chapters there are some difficult concepts that I’ve placed in boxes labeled “Advanced Work.” These include rational expectations versus adaptive expectations, the paradox of thrift, and the effects of monetary policy in an open economy. Like the topics in the appendices, this material can be mastered by only our best students.

There are also boxes within most chapters labeled “Extra Help.” For instance, in Chapter 5, there’s a box “Finding Consumption, Savings, the MPC, and the APC on a graph.” In the text, I‘ve already explained how to measure C from a graph of the consumption function. This box provides extra help for students who need it, but everyone else can skip it.

What I’ve done, then, is confine the most difficult material to advanced work boxes and appendices, while providing extra help boxes for the least able students. So there are really three different levels of work: (1) the extra help boxes; (2) the mainstream text; (3) the advanced work boxes and appendices, which bring us back again to the question: To whom do we pitch our course?

My book enables you to reach all three groups of students. And even better, you won’t have to waste valuable class time going over arithmetic that should have been learned in seventh or eighth grade. A student who can’t figure out percentage changes is referred to the box in Chapter 9, “Calculating Percentage Changes.” Even converting fractions into decimals is reviewed. If it’s gone over step-by-step in the text, there’s no need for you to go over it in class.

So what have is a three-track book—a mainstream text, advanced work boxes, and extra help boxes. That way, everyone can work at his or her own pace, and you no longer have to waste valuable class time going over the basics.

Is the book too long?The main complaint that we’ve gotten from our users and reviewers is that the book is too long. When you consider, however, that this is a workbook and textbook combined, it may well be the shortest principles text on the market. And yet, most instructors cannot get through it in two semesters. Now if our book is too long, then what can be said about some of the longer principles tomes which run over 1,000 pages? No matter how esoteric the topic, you’ll find it included because somewhere out there, one or two professors asked that it be included. But we’ve concentrated instead on the core topics in macro and

viii

micro, which most professors have trouble covering as it is. So while it would be nice to include another eight or ten chapters, we need to remember that we’re doing a principles text, not the Encyclopedia Britannica.

Special features of the textbookBecause the text has a built-in workbook, all the pages are perforated and can easily be torn out. Students can tear out homework assignments to be handed in. When homework must be handed in, students are much more likely to have done the reading.

All of the math—including simple arithmetic and elementary algebra—is carefully explained in the text, so you will not have to waste class time going over math that should have been learned in middle school. Students are encouraged to read actively, rather than passively. They are asked to work out problems, complete tables, and draw graphs right in the text.

Today’s students are used to having their professors summarize their reading assignments in the form of lectures. Why bother plowing through a boring text when the professor will do the reading for them? For their part, the students will obligingly take notes. Of course they haven’t figured out that they could allocate their time much more efficiently by reading the book—even if it is boring—than by taking copious notes in class and cramming the night before each exam.

So the real trick, then, is to get your students to start reading the book. Once they get into it, they’ll keep reading. And then, instead of summarizing each chapter, you’ll be answering questions, moderating class discussions, and making witty observations. Just get them to the leap of faith and begin to read, and everything else will fall into place.

For each chapter of the Manual you will find A list of goals called “After studying this chapter the student should be able

to.” Getting started: Ideas to jump-start your lecture. Connect to what students

already know—or what they think they know, but don’t. Active learning strategies: Ideas for deeper student learning in class. Homework questions and projects: Ideas for homework and special projects

outside of class. Answers to end-of-chapter workbook questions.

ix

What’s New and Different in the Ninth Edition?

If you used the eighth edition, you might want to know what I cut and what I added. These chapter-by-chapter changes may be of some interest. But if you’re using the book for the first time, then you’ll want to skip this list.

There are two main additions. Most chapters now have one or two “On the Web” blurbs, which direct the student to interesting websites. And I’ve added a practical application to the “Questions for Thought and Discussion” at the end of virtually every chapter.

At the urging of several reviewers, I’ve switched the order of Chapter 3 and 4. In the micro sequence, you can now go directly from Chapter 4, “Supply and Demand” to Chapter 5 (in the Micro split) or 17 in Economics, “Demand, Supply, and Equilibrium.”

Following another suggestion of the reviewers, I reorganized much of Chapter 17 to provide more clear-cut graphs and problems. Two new sections were added to Chapter 18: “Income Elasticity of Demand” and “Cross Elasticity of Demand.” Chapter 28 was completely reorganized to facilitate the flow of discussion.

Chapter 1. No changes.

Chapter 2. No changes.

Chapter 3. Was Chapter 4 in 8th edition.

Chapter 4. Was Chapter 3 in 8th edition.

Chapter 5. Cut box: “A Word about Numbers.” Expanded Savings section, expanded “The Saving Function;” added Figure 6. Replaced Figures A and B in Extra Help box, “Finding Consumption, Savings, the MPC, and the APC on a Graph.” Added section, “Maintaining a ‘Basic’ Standard of Living.”

Chapter 6. Added section, “Why isn’t education spending classified as investment?” Replaced Figure 4, “The Consumption Function.”

Chapter 7. No changes.

Chapter 8. No changes.

Chapter 9. Cut most of section, “The Flow-of-Income Approach,” including Table 2 and Figure 4. Added two paragraphs on the components of National Income and Table 2; added Table 3. Cut Extra Help box, “Reviewing the Two Approaches to GDP.”

Chapter 10. Added short section, “Are Economic Fluctuations Becoming Less Extreme?” including Figure 4.

x

Chapter 11. No changes.

Chapter 12. New Figure 5; cut Figure 9. Cut section, “Conclusion;” added Figure 10.

Chapter 13. Added short section, “Other Useful Properties of Money;” cut three-quarters of a page from section, “Four Influences on the Demand for Money.” Cut Figures 3, 4, and 5. Cut sections, “The Demand Schedule for Money,” “The Liquidity Trap” (moved to Chapter 14), and “The Determination of the Interest Rate.” Added sections, “Microlending,” and “Internet Banking.” Cut section, “The Creation and Destruction of Money,” and moved to Chapter 14. Cut section, “Wal-Mart Bank?”

Chapter 14. Added section, “The Creation and Destruction of Money,” which had been in Chapter 13. Added section, “A Summing Up: The Transmission Mechanism.” Added Figures 5 and 6. Added section, “The Liquidity Trap,” (moved from Chapter 13).

Chapter 15. Added short section, “Andrew Mellon: Our First Supply-Side Economist.”

Chapter 16. New section: “Global warming and economic growth.”

Chapter 17. Two major changes: pp. 412 (bottom), 415 (top), 417 (top), and 421 (top) are completely rewritten to provide clear-cut graphs and problems. Figures 2, 3, 4, 6, 7, and 8 are new, as are the problems based on these graphs. Added very short section, “Random Causes.” Made entire text page into Advanced Work box, “Finding Equilibrium Price and Quantity.” Cut Table 8 and two paragraphs below it.

Chapter 18. Added new introductory section, “The Elasticity of Demand,” and the former section, “The Elasticity of Demand” is renamed, “The Price Elasticity of Demand.” Created Extra Help Box, “More Practice Calculating Price Elasticity of Demand,” from problems that had been in the text. Cut Figure 7; cut box, “When Advertisers Go Too Far;” added Advanced Work box, “How Total Revenue Varies with Elasticity.” Added two sections, “Income Elasticity of Demand” and “Cross Elasticity of Demand.” Changed Last Word to Current Issue: “The Price Elasticity of Demand for Oil.” Cut Current Issue, “How Elastic is Your Demand for Food?”

Chapter 19. No changes.

Chapter 20. Added three paragraphs to “Marginal Cost” section. Replaced Figure 3 with new graph. Added Figure 7.

Chapter 21. Reorganized chapter format: Chapter begins with Part I: Profit and Loss. Added discussion of three ways to calculate profit or loss, including Tables 3 and 4. Beginning of Part II: Perfect Competition. Cut short section, “Do You Really Need to Make a Profit?” Cut box, “You get what you pay for, right?”

xi

Chapter 22. Cut last two paragraphs from section, “Calculating the Monopolist’s Profit.” Made box, “The Monopolist Losing Money,” part of the regular text. Added section, “Alternative Method of Calculating Monopolist’s Profit or Loss,” and Figures 4–7. Added section, “Last Word” on page 558.

Chapter 23. Added Figure 4. Cut Advanced Work box, “Who’s Got the Flatter Demand Curve?” Added section, “Advertising and Monopolistic Competition.” Added a page of text and Figures 5 and 6 to section, “Price Discrimination.” Cut Advanced Work box, “How A&P Created Grades A, B and C to Raise Its Profits.”

Chapter 24. Added section, “Game Theory.”

Chapter 25. No changes.

Chapter 26. No changes.

Chapter 27. Cut Figure 1A.

Chapter 28. This chapter has been reorganized. The new ordering of topics: (1) The supply of labor; (2) The demand for labor; (3) Determination of the wage rate: supply and demand; (4) High wage rates and economic rent; (5) Real wages versus money wages; (6) The minimum wage and the living wage; (7) The effects of employment discrimination on wages. Page 665: Added section, “The market supply of labor,” including Figure 2, “Hypothetical Labor Market Supply,” and Figure 3, “Hypothetical Labor Marginal Revenue Product Curve.” Moved pp. 667–670 up. “The effects of employment discrimination on wages,” moved to end of chapter. Old page 670 (now near end of chapter). Changed Figures 4 and 5. Added Extra Help box, “Quick review of calculating percentage changes.” Cut most of bottom half of page 674 in section, “Real wages versus money wages.” Cut Advanced Work box, “The real minimum wage,” and Figure 9. Added to section, “Should there be a minimum wage rate?” 7 paragraphs of text and Figure 10.

Chapter 29. No changes.

Chapter 30. Rewrote entire section, “Differences in Wages and Salaries.” Cut 5 paragraphs from section, “Who are the poor? Cut box, “Abortion, Crime, and Poverty.” Cut 4 paragraphs from box, “Support our troops.” Changed Current Issue from “Will Social Security be there for you?” (which is now in Chapter 7 of Economics and Macroeconomics to “Will you ever be poor?”).

Chapter 31. Added very short section, “Absolute Advantage.”

Chapter 32. No changes.

xii

What Can Be Skipped in Macro and Micro Courses?There is virtually no way to cover all of the chapters in any principles text. So which ones should you skip? Obviously different professors would skip different chapters. Here’s a chapter-by-chapter run-down to help you make your choices.

Macro: Chapters 1–16

Chapter 1: A fairly long chapter on U.S. economic history.

Chapter 2: This chapter should not be skipped. But you certainly don’t need to cover every topic.

Chapter 3: The basic groundwork is laid here for the rest of the book.

Chapter 4: Provides a brief overview of supply and demand. Beginning in Chapter 5, graphical analysis is gone over from scratch, so Chapter 4 can be safely skipped if you don’t emphasize supply and demand analysis in macro.

Chapters 5–8: These are core chapters discussing GDP and its four components—C, I, G, and Xn. Within each chapter there may be some sections you might want to skip.

Chapter 10: Business cycle, unemployment, and inflation are taken up in turn. If you need to skip one, skip business cycles.

Chapter 11: This is one of the hardest chapters in the book. Part I, however, is relatively easy. However, if you do skip this chapter, you’ll need to explain equilibrium GDP and full employment GDP before you cover Chapter 12.

Chapters 12–14: These chapters cover all the basics of fiscal policy, the national debt, money and banking, and the Federal Reserve and monetary policy. There may be some topics within these chapters that you may want to omit.

Chapter 15: The five basic schools of twentieth century economic theory are covered in the chapter and the Keynesian-Monetarist debate over money is discussed in the appendix. The entire chapter, and certainly the appendix, can be skipped.

Chapter 16: The main questions raised are what determines a nation’s economic growth rate and why did ours slow in the mid-1970s and then pick up again in the mid-1990s.

Micro: Chapters 17–32

Chapters 17–21: These are core chapters, following a logical sequence. I recommend that every topic be covered. However, Ch. 19, “Theory of Consumer Behavior,” does not introduce any concepts that are repeated in later chapters.

Chapters 21–24: These take up the four types of competition. These chapters can be skipped in a short course.

xiii

Chapter 25: Corporate Mergers and Antitrust is not a micro chapter, but it is closely related to oligopoly.

Chapter 26: This chapter on demand in the factor market should not be skipped if Chapters 28 and 29 are assigned.

Chapter 27: This deals with labor unions and may be skipped.

Chapter 28: If you assign the previous chapter, then this discussion of labor markets and the determination of wage rates can follow easily.

Chapter 29: This concludes our discussion of factor markets and the determination of rent, interest, and profits. The sections on the net productivity of capital, the capitalization of assets and the present value of future income may be too technical for some students.

Chapter 30: Income Distribution and Poverty. Approaching the end of the semester, you may want to skip this chapter to leave time to cover Chapters 31 and 32.

Chapter 31: International Trade

Chapter 32: International Finance

One-Semester Courses

Here are some syllabi for one-semester courses with varying orientations.

Macro oriented

Chapters 19; 1214; 17; 2832

Chapters 13; 10; 1214; 1617; 25; 2832

Chapters 110; 1617; 25; 3032

Micro oriented

Chapters 24; 10; 1625

Chapters 14; 1624; 3132

Chapters 23; 1721; 2632

Balanced approach

Chapters 19; 1721; 3132

Chapters 14; 1621; 2530

xiv

A one-semester course that focuses on contemporary problems

Chapters 10; 1214; 16; 25; 2832

Last WordWhat separates professors from their students? One thing is that the professor always reads the text, or, in any event, stays at least one chapter ahead of the class. Another thing that separates professors and students is that only the professors get copies of manuals like this one. This manual provides the answers to the workbook sections of the textbook. All of the questions that appear at the end of each chapter are answered here. It also has the worksheets and worksheet solutions. A test bank with over 8,000 questions is also available. These questions include Learning Objective tags and are ranked by difficulty level, AACSB categories and Bloom’s taxonomy level. These are unique questions, not repeated in the online quizzes. Also available to instructors are PowerPoint presentations for each chapter and a Digital Image Library. For students, a complimentary quiz is available for each chapter, and a quiz for the beginning and end of each chapter is available for purchase at the website. For more information go to: www.mhhe.com/slavin9e.

xv

What Works in the Classroom?

There is, of course, no single secret to helping students learn. In fact, many students report that they like a variety of learning environments in their college education and even within a single course. Nonetheless, in the literature on higher education, three recommendations stand out:

1. David Ausubel writes in his textbook, Educational Psychology: A Cognitive View:

"If I had to reduce all of educational psychology to just one principle, I would say this: The most important single factor influencing learning is what the learner already knows. Ascertain this and teach him.”

2. William McKeachie, co-author of McKeachie’s Teaching Tips: Strategies, Research and Theory for College and University Teachers, concludes in a review of research on teaching and learning the college classroom:

“If we want students to become more effective in meaningful learning and thinking, they need to spend more time in active, meaningful learning and thinking—not just sitting and passively receiving information.”

3. In What the Best College Teachers Do, Ken Bain observes that successful teachers helped students to increase their:

“capacity to think about one’s thinking—to ponder metacognitively—and to correct it in progress.”

These three insights are supported by research on learning in general, summarized in the important study How People Learn: Brain, Mind, Experience and School (National Research Council) and underlie the structure of both Economics and this manual. The textbook uses examples drawn from student experience, encourages students to practice what they have learned, and then to think about their learning in the book’s unique built-in study sessions.

In this manual, each chapter begins with activities to help instructors that assess what students bring to the classroom so that instructor will have a better sense of what students “already know.” Many students are adept at memorizing fairly large and sophisticated bodies of knowledge, only to forget them in a short time, and never to apply them to problems outside of the classroom. Thus, a first task for instructors is to find out where students are—and to help student assess their current view of the world, including ways in which their current understanding is scanty, fails to provide answers, or leads to contradictions.

xvi

The manual also includes numerous activities for each chapter that encourage students to engage with economic concepts in small groups, experiments, surveys and assessment of their own learning. This manual puts the recommendation into usable form with a large number of activities ready to go for classroom use. Of course no instructor will use more than a tiny fraction of those listed for each chapter. Instead, each instructor will adapt the activities to his or her preferred classroom teaching style. The intention is provide repertoire of activities that can be used as readily as variations on the lecture-discussion teaching style that predominates in most college classrooms. In other words, with practice instructors and students can move smoothly from a teacher-focused lecture to an active learning session and perhaps back to a lecture.

Using small groups

“Classroom research has consistently shown that cooperative learning approaches produce outcomes that are superior to those obtained through traditional competitive approaches, and it may well be that our findings concerning the power of the peer group offer a possible explanation: cooperative learning may be more potent than traditional methods of pedagogy because it motivates students to become more active and more involved participants in the learning process” A.W. Astin, What Matters in College: Four Critical Years Revisited, 1993.

The active learning techniques in this manual emphasize small group work in a highly structured format. As Alexander Astin points out in the quote above, the educational research on this issue is clear: small group work is the best-documented successful pedagogy for student learning. As instructors, we have had the experience of better comprehending a topic when teaching it to others. As graduate students, many of us remember the importance of discussions with learners at the same level of development. Thus this manual provides many activities in which students are asked to explain ideas to one another using such techniques as classroom debates, send a problem, and classroom experiments.

Based on previous experience, some instructors and students will disdain the idea of group work. In particular, graded group work with free-riders or off-track unfocussed small group discussions have soured some on the use of small groups. However, just as effective lecture-discussion requires a skillful practitioner, small group work needs attention to structures that promote learning. It makes sense to change ones teaching style slowly, adapting new techniques incrementally. The easiest-to-use small group task is think-pair-share, a structured break in the lecture format.

xvii

Think pair share

Quick overview

Timing: After no more than 20 minutes of lecture, pose a question that can be answered in a sentence or two.

Think: Allow students at least one minute to think individually about the problem.

Group formation: Students turn to another student sitting nearby, preferably someone they don’t know well.

Pair: Students take turns sharing their answers with their partner.

Share: Call on a few student pairs to report their answers.

Think-pair-share requires no more than a few minutes of class time and can be used with little preparation. After a period of lecture—twenty minutes is the maximum to which most adults can pay close attention for learning new material, stop to pose a question. It may be a question that tests understanding by asking students to answer using the previous lecture material. Or, the question may ask students to apply the lecture concepts to their own lives. Or, it may prompt students for what is confusing at this point and still needs to be explained.

One way to prompt on-task discussion by students is to use techniques that narrow the question focus called “Quick Thinks,” (Susan Johnston and Jim Cooper, “Quick-thinks: Active-thinking Tasks in Lecture Classes and Televised Instruction,” in James L. Cooper et al Small Group Instruction in Higher Education, New Forums Press, 2003.)

“Select the best response” Pose the question in multiple-choice format. Pairs must select the best response and be prepared to defend the choice.

“Find the error” Pose a statement with one or more common student errors. Pairs must identify the errors and correct them.

“Support the statement” Pose a statement focusing on one important concept. Pairs must list evidence in support of the statement.

“Summarize the idea” Ask student pairs to summarize an important concept as if they were speaking to their roommate or their 82 year-old uncle or a 15 year-old sibling. (The identification of an audience will help students to restate classroom ideas in new language.)

xviii

“Place in correct order” Present students in random order a list of events or ideas that can be placed in correct order. Pairs must determine the correct order and be prepared to explain their reasoning.

For more information about think-pair-share and documentation of its successful use in higher education see:

Elizabeth Barkley, K. Patricia Cross, and Claire Howell Major, Collaborative Learning Techniques: A Handbook for College Faculty, Chapter 7.

Barbara Millis and Philip Cottell, Cooperative Learning for Higher Education Faculty, Chapter 5.

Extended small group work

Quick overview

Group size: 2–4 students

Group composition: friends don’t work together

Instructions: written with large space for student work

Roles: one student (rotated) as recorder

Interdependence: Something in structure requires input of all students

Group accountability: No group grades; at random, some groups report results

Individual accountability: Follow-up activity (paper, test) requires individuals to demonstrate learning

Small group as part of an in-class experiment, case study, debate or a survey will require groups larger than two students and more extensive planning than is required for think-pair-share. The consensus among teaching experts is that the following features are associated with successful small group work in college classrooms:

Careful attention to group size. No more than four students per group. Larger groups seldom allow all students to participate. Also groups with four students can be divided into two groups of two for sub-tasks within the overall project.

Group composition. Heterogeneous groups by skill level, gender, and social and ethnic background. Experts agree that groups work best when friends do not work together. In fact, students appreciate ‘permission’ from the instructor to choose

xix

partners who are not friends; it is socially awkward to turn away from friends even though a student may know that more learning will take place with someone else. (Note: There is some evidence that maximum heterogeneity may not always be desirable. In particular, women and minority groups may appreciate a second small group member from their background. Also, highly skilled students may learn more and appreciate opportunities to work with other students with the same high-skill level.)

Attention to social skills. Students may be inexperienced in working with others. Explain to students why group work is helpful to their learning, progress in the class, and even success in the outside work world. Praise successful group interaction (without identifying individual groups or names.)

Individual accountability. Avoid group grades; they are the main reason why students have negative experiences with group work. Course grades are based on individual competence; group work is a means to help individuals achieve higher grades. One implication for this approach is non-curved grades so that students aim for individual achievement and are not in competition with one another for a scarce number of high grades.

Positive interdependence. Structure activities so that all group members need to be involved. If possible, the group’s final product should require everyone’s input and the group’s success requires that each individual successfully understands the material.

Written instructions; tangible product. Minimizes student questions and wasted group time on “what should we do” by providing written instructions. The final product should be identified clearly although it may be simply a list of reasons or a written explanation signed by each group member.

For references on cooperative learning see

Elizabeth Barkley, K. Patricia Cross, and Claire Howell Major, Collaborative Learning Techniques: A Handbook for College Faculty. Easy-to-use, well written reference work on cooperative learning.

Barbara Millis and Philip Cottell, Cooperative Learning for Higher Education Faculty. Extensive reference work on cooperative learning in college classrooms. Includes numerous references and discussion of many types of activities.

Cooperative controversy (small group debates)

For Chapters 8, 16, 22, 23, 25, 27, 28, 29, 30, 31

xx

Quick overview

Time: ten minutes minimum to an entire class period

Topic: Statement that can be defended or criticized

Group composition: two groups of two students each

Format: One pair lists reasons in support of statement while other pair lists reasons opposing statement. Pairs share reasons. Group of four selects strongest argument on each side and, if appropriate, reaches consensus on final position.

Classroom discussion often encourages students to debate one another. Although lively, such discussion cannot in even moderately large classes involve more than a minority of students. The cooperative controversy ensures that every student is involved in the debate. Moreover, it can help students see the arguments on both sides of an issue, often a difficult task for college students. Finally, the technique helps focus on an outcome such as identification of the strongest argument on each side or a final position. These outcomes may be useful in a follow-up student essay or paper.

ReferencesBarbara Millis and Philip Cottell, Cooperative Learning for Higher Education Faculty. pp. 140–143.David W. Johnson, Roger T. Johnson and Karl A. Smith, Active Learning: Cooperation in the College Classroom, Chapter 7.

Send a problem

For Chapters 6, 7, 9, 10, 11, 12, 14, 15 17, 18, 19, 20, 21, 26, 29, 31, 32

Quick overview

Time: five minutes to one-half hour

Concept: A topic already studied for which students can make up a problem for others to solve. Usually the instructor needs to structure the problem so that it focuses on one concept by defining some of the initial parameters.

Format: Working in pairs students construct a problem for another pair to solve. Students exchange problems, solve them and then pass them back to the original pair to check.

xxi

Pass-a-problem breaks up the usual routine in which the instructor poses a problem. Student-created problems have several advantages over those made up by the instructor. First, the technique forces students to think about what they should know. As instructors frequently discover, the subtleties of a concept are evident when constructing a problem. Second, pass-a-problem means that each student group is solving a different problem, so students are less likely to sandbag, that is passively wait for the instructor to provide the answer. When each group has a unique problem, students know that they are responsible for finding the answer. Third, students often feel more committed to solving problems posed by their peers than those posed by the instructor. The pass-a-problem activities described in this manual frequently suggest that the instructor help students to focus the problem on a key concept. Students are more likely to follow such constraints if the problem is presented in written form with the instructions clearly stated.

ReferencesBarbara Millis and Philip Cottell, Cooperative Learning for Higher Education Faculty. pp. 103–105.

Surveys

For Chapters 3, 19, 18, 28, 30

Quick overview

Time: 15 minutes to entire class period

Topic: Concept on which students can collect data on behavior or characteristics of other students (demand for a good or service, work hours and so on.)

Format: Either the instructor provides the survey or, if appropriate, students write the survey. If data is not to be confidential, students work in small groups, first surveying their own group members for practice and then surveying other students. If data are confidential, then information is collected on paper without names and then distributed at random back to students. Data on the entire class is totaled by surveying students based on the paper they received, not their own personal information. Working in small groups, students analyze the data collected.

In terms of classroom management, surveys have the inherent advantage of turning student attention to other students who possess the necessary input. The least skilled student has a piece of data required for success. Another benefit of surveys is that the outcome is also student-based. Some survey techniques give each small group different information for analysis so that sandbagging, that is waiting for the instructor to solve the problem cannot occur.

ReferencesMark Maier, “Using Surveys in Cooperative Learning,” in James L. Cooper et al Small Group Instruction in Higher Education.

xxii

Classroom assessment: At the beginning of class

Quick overview

At the beginning of class or a new unit

Time: Three to ten minutes

Format: Ask students a question relevant to upcoming material. Answers are reported in one of the methods described below.

Sample questions: What surprised you in the assigned reading? What didn’t you know before you did the reading? What experience have you had with….? What did you learn in previous courses about….?

Although classroom assessment could be used to find out what students don’t know about a subject, it is more helpful to find out what students do know so that the instructor can make connections to the student’s previous experience and understanding. Also, non-evaluative classroom assessment will be seen by students as a supportive tool; many students are painfully aware of their lack of knowledge. The instructor might point out contradictions in student views or gaps in most students’ understanding that will be addressed in the chapter.

ReferencesT. A. Angelo and K. P. Cross Classroom Assessment Techniques: A Handbook for College Teachers, 1993.K. Patricia Cross and M.H. Steadman Classroom Research: Implementing the Scholarship of Teaching, 1996. See especially Chapter 2 on an economics course.

Classroom assessment: At the end of class

Quick overview

Time: Three to ten minutes

Format: Ask students to reflect on learning during the class or the unit. Answers are handed to the instructor, perhaps for a personal response, or perhaps for general discussion at the next class meeting.

Sample questions: (at the end of class) get C&A(at the end of a unit) Which reading (or idea) changed your thinking the most in this unit? Why?

There is considerable evidence that students learn more effectively when they practice metacognition, that is, self-awareness of what they have learned. When we think back to

xxiii

what we knew or understood at the beginning, and how this has changed over time, we are more likely to retain this knowledge and apply it in new situations.

ReferencesT. A. Angelo and K. P. Cross Classroom Assessment Techniques: A Handbook for College Teachers, 1993.Mark Maier and Ted Panitz “End on a High Note: Better Endings for Classes and Courses,” College Teaching, Fall 1996.

Classroom experiments

See Chapters: 2, 3, 13, 14, 17, 18, 19, 20, 26, 28

Quick overview

Time: Ten minutes to several class sessions

Sources: See Econport at http://www.econport.org/econport/request?page=web_homel,and Games Economists Play at http://www.marietta.edu/~delemeeg/games/.

In recent years, there has been fast-growing interest in classroom experiments for teaching economics principles. The use of experiments in class no doubt results in part of a growing interest by economists in modeling economic behavior in the laboratory. But the primary motivation for experiments is that they allow students to see economic principles in action. If an instructor can refer to a particular behavior—“when Julio bid 25 cents in the auction”—students are more likely to remember the event than a reference such as “the price on a demand curve.”

The major challenge for instructors is effective use of class time. There are entire courses that teach economics through experiments, but most instructors using Slavin’s Economics will want a much more modest approach to experiments. Build up slowly, perhaps with one new experiment every time a course is taught. Sources with ready-to-go experiments are listed below.

Humor

Jokes and cartoons not only will grab your student’s attention and add fun to your class, but they also can require sophisticated economic understanding. Sources for jokes and cartoons include:

"JokEc: Jokes About Economists and Economics" athttp://netec.wustl.edu/JokEc.html.

xxiv

New Yorker cartoons at:http://www.cartoonbank.com.

Syndicated cartoons are available at:www.unitedmedia.com/.

Economics in the movies

On the use of film clips in teaching introductory economics, see http://economicsinthemovies.swlearning.com/.

Testing and Academic integrity

For an extensive discussion of issues related to testing, see Barbara Gross Davis, Tools for Teaching, Chapter 8.

For an on-line site devoted to issues of academic integrity see Duke University’s The Center for Academic Integrity at http://www.academicintegrity.org/.

More Teaching ResourcesPeriodicals

***I’ve only time for one***

The Teaching ProfessorGrp@psu.eduMagna Publications

College TeachingHeldref Publications, 1319 Eighteenth Street, NW Washington, DC 20036-1802 USA. Tel: 202/296-6267; FAX: 202/296-5149 or visit their Web site at http://www.heldref.org/.

Books

***I’ve only time for one***

William E. Becker et al Teaching Economics: More Alternatives to Chalk and Talk. Edward Elgar Publishing, 2006. Collection of essays on game theory, classroom experiments, cooperative learning, case method, large lecture class techniques and more.

xxv

Colander, David. The Stories Economists Tell. McGraw-Hill/Irwin 2006. Articles on content and pedagogy in the economics curriculum.

Salemi, Michael K. and W. Lee Hansen, Discussing Economics: A Classroom Guide to Preparing Discussion Questions and Leading Discussion, Edward Elgar, 2005. Instructions for conducting discussions in class and key articles appropriate for the undergraduate curriculum.

McKeachie, Wilbert James and Marilla Svinicki, McKeachie’s Teaching Tips: Strategies, Research and Theory for College and University Teachers. A classic, updated in this tenth edition.

Angelo, Thomas A. and Patricia Cross. Classroom Assessment Techniques: A Handbook for College Teachers. San Francisco: Jossey-Bass, 1993. See also, Angelo, T.A. Classroom Assessment and Research: An Update on Uses, Approaches, and Research Findings. San Francisco: Jossey-Bass, 1998. Ready-to-use techniques for finding out what your students have learned.

Bligh, Donald A. What’s the Use of Lectures? San Francisco: Jossey-Bass, 2000.Updated classic. Uses research evidence to evaluate lecture techniques.

Davis, Barbara Gross. Tools for Teaching. San Francisco: Jossey-Bass, 1993.Comprehensive guide for the beginning and experienced teacher.

Palmer, Parker. The Courage to Teach. San Francisco: Jossey-Bass, 1998. Highly influential, thoughtful reflection on effective teaching.

Web resources for teaching economics

*** I’ve only time for one***

Resources for Economists at http://www.rfe.org/ This site continues to be the best general resource for finding economics resources on the internet. It contains an extensive list of annotated links to a wide variety of topics.

The Teach-Econ Mailing List Subscriptions: In order to subscribe to the list tch-econ, simply send a message to elon-listserver@elon.edu with subscribe tch-econ "email address you wish to have subscribed," without the quote marks and with the appropriate email address inserted, in the body of the message.

International Association for Feminist Economics at http://www.iaffe.org.View syllabi, readings, and links to feminist inquiry in economics.

xxvi

Economic Education Web at http://ecedweb.unomaha.edu/teach-ec.htm. Comprehensive listing of links to data, textbooks, and “why study economics?”

Journal of Economic Education at http://www.indiana.edu/~econed/.View entire articles, search past issues by title, and see the new online section.

Econport Links to classroom experiments available at http://www.econport.org/econport/request?page=web_home.

McGraw-Hill’s Homework Manager PlusTM

McGraw-Hill’s Homework Manager Plus is a complete, Web-based solution that includes and expands upon the actual problem sets and the graphing exercises found in the Workbook pages at the end of each chapter. Virtually all Workbook questions are autogradable and all of them conveniently tied to the Learning Objectives in the text.

McGraw-Hill’s Homework Manager delivers detailed results which let you see at a glance how each student performs on an assignment or an individual problem. This valuable feedback also helps you gauge the way the class performs overall. This online supplement can be used for student practice, graded homework assignments, and formal examinations; the results easily integrate with WebCT and Blackboard.

xxvii