Geo-point Graphs: An Alternative to Marshallian Cross Diagrams

1. Geo-point Graphs: An Alternative to Marshallian Cross Diagrams November 8, 2012 Economics Teaching Conference Orlando, FL

2. The Marshallian Cross • ...the law of demand...is the single most powerful proposition in all of economics...[it] has the capacity to explain an incredibly diverse range of human behaviors...The great explanatory power of the law of demand is almost matched by that of the law of supply... (Miller, Benjamin and North, p. 27)

3. Price $20 Supply $15 $10 $5 Demand 0 5 10 15 20 Quantity

4. Demand and Supply Line Graphs • Simplify the complexities of the price system • But line graphs are challenging for students

5. Student/Instructor Personality Types • Using Meyers-Briggs Type Indicator (MBTI) • Roanoke College Freshman (F’90) – less than 5% were INTJ – many instructors (including me) are INTJ: “Introverted Intuition with Extraverted Thinking” • A plurality of students were ENFP: “Extraverted Intuition with Introverted Feeling”

6. INTJ • “Usually have original minds and great drive for their own ideas. Have a fine power to organize a task and carry it through without help in areas that appeal to them. Are skeptical, critical, independent, determined, and often stubborn. Tend to be serious and to set high standards. Prefer challenging teachers. Don’t readily follow fads.” (And love graphs!)

7. ENFP • “Are warmly enthusiastic, ingenious, and imaginative. Are able to do almost anything that interests them. Are quick with a solution for any difficulty. Are interested in people and skillful in handling them and their problems. Often rely on their ability to improvise instead of preparing to advance. Dislike inspired routine and attention to detail.” (And hate graphs!)

8. Does it Matter? • No one is recommending getting rid of line graphs • But an alternative, complementary approach has value: • 1. For K-12 instructors & Students • 2. For instructors and students who are not INTJ • 3. For empirical market studies

9. 1. K-12 Instructors and Students • 49 states have economics standards – many require knowledge of markets in middle school • PA - Describe the interaction of consumers and producers of goods and services in the state and national economy (6th grade) • To be effective – K-8, not just HS - teachers must teach demand and supply

10. 2. Non INTJ Students • “Chalk and Talk”- still dominant among economics Instructors (Watts/Becker surveys) • “If we want to increase learning in economics, then we need to devise ways of presenting course material that are accessible to all students regardless of how they receive and process information. At a minimum, this suggests the need for a variety of classroom pedagogies and a better understanding of the role of personality temperament in learning and teaching.” (Ziegert)

11. 3. What’s Wrong with This Example? Chevrolet Silverado PU

12. In Real Markets We “see” actual, not hypothetical prices • Line graphs represent a “convenient fiction” • 1. They imply continuity. • 2. They do not distinguish actual from hypothetical prices.

13. Price Shortage - only the circle and square in black are “seen” $20 $15 $10 $5 0 5 10 15 20 Quantity

14. Price $20 $15 $10 $5 0 5 10 15 20 Quantity

15. Price $20 Equilibrium price is the market price $15 $10 $5 0 5 10 15 20 Quantity

16. Changes in Demand and Supply • On the following slide: • I – increase in demand moves equilibrium point into this quadrant • II – increase in supply moves equilibrium into this quadrant • III – decease in demand moves equilibrium into this quadrant • IV – decrease in supply moves equilibrium into this quadrant

17. Price $20 I IV $15 $10 II III $5 0 5 10 15 20 Quantity