Classroom Experinomics -
Using Experiments for Teaching Economics


Dr. G Bharathi
Asst. Professor-Economics
Aurora's Post Graduate College
Chikaddpally, Hyderabad-500 020

Teaching economics has been always challenging for a teacher especially when there are several external factors that govern what has to be taught and what not. Generally it is seen that students find a complete lecture method uninteresting, more so when the concepts are difficult to comprehend. Involvement of students then becomes imperative and to meet this objective the change in the method of instruction serves a useful purpose. Here are some classroom experiments that I have used in my classes and my students find it extremely useful.

Teaching economics has been always challenging for it not only requires the teacher to impart knowledge concepts to the students effectively like any other subject, but it also demands that the teacher makes the class interesting as most of the time the curriculum involves lots of concepts, theories and laws. There are several problems, which a teacher encounters while teaching economics to students in a classroom environment with a predetermined syllabus. In majority of the cases the following are common observations, Firstly, an average students attention span being very short, they do not concentrate on the lecture unless and until he/she finds it really interesting and useful. Second, the students in general find the concepts very abstract in nature, and most of the time they find it difficult to understand, retain and recall whenever required. Third, the students do not relate the subject and the concepts quickly/ easily with practice, unless a special effort is done by the teacher towards this end. Fourth, students are not able to relate the subject with other streams of knowledge especially the other courses studied by them such as strategy and marketing to which the subject id closely related and therefore they try to learn the subject in isolation. This makes them feel that this subject is unwanted and dry in nature.

Here the blame cannot be fixed solely on students, curriculum, and the subject, or the teachers at large. In fact, the blame if at all exists has to be shared as most of the teachers find that in a typical classroom setting in which a subject is supposed to be taught with a specified syllabus within a specified number of classes/ sessions allotted with a specific duration, nothing innovative is possible. Here the number of factors at the discretion of a teacher is none. This indicates that the external and uncontrollable factors in the environment of operation are many when compared to the internal and controllable factors. The system is so tight and rigid that any movement outside it seems very difficult and non-acceptable. The need therefore, is not only to operate with these external controls at one stage but also to see to it that in the given situation how one achieves optimal results. In the above context integrating the content and method seems quite relevant.

In my article in the Journal Edutracks (April 2004) on "Integrating Content and Method a case Study of Managerial Economics' I had raised certain of the above issues and also given some possible suggestions. In continuation here are some more aspects that can be looked into by a teacher to integrate the concept being taught with the method used with the objective of overcoming the above mentioned problems in a classroom. These methods do not require any special requirement by the teacher except for a small reorientation of attitude and approach. 

A teacher has to reassure himself/herself on certain issues. Before entering a class the teacher should ask certain questions to oneself. Besides understanding the concept or topic that is going to be discussed and the details of it (descriptive and analytical understanding) a teacher has to ask himself/herself what is the best way to learn this topic? Generally we ask ourselves, what is the best way to teach this topic? This is wrong way of putting things because ultimately our audience should learn not teach. So the objective also should be to make it learn or acquire nor give or deliver. Some more aspects that requires pondering over is-what is it that a student "Must know", "Should know" and "could know" in the topic which would be discussed. The method and the extent of teaching would largely depend on the answers to the above questions.

The next aspect is to find out who is my target audience and how is this topic going to be useful for them to understand and learning; how long should they know this topic (till exam) or beyond, are they going to pursue a major study in economics (or the subject concerned) or are they going to diversify to some other field after this learning; is economics a core paper or an elective paper for them. Are they pursuing the education in economics as a supplementary course i.e. is they learning economics to specialize in it or are they using as an intermediate course. Is it a course which is given as a foundation to them or is it an orientation for them towards their main course? What would be the learning outcome of the entire course for the students? Answering these questions gives a lot of clarity to the teacher as to which method should be used in delivering a topic and to what extent (scope) they should be limited to.

However, whatever be the level at which the subject is taught, students find some of the concepts abstract, which can be solved only through adopting the process of "learning by doing". I prefer to call it classroom experinomics- using experiments in the classroom environment to teach the concepts of economics. Involvement of the student in the classroom activities increases tremendously.  Out of the total sessions allotted to me to handle a specific course in economics, I specifically make it a point to use at least 20% for experiments in economics concepts. That is just say 10 sessions out of the 50 I take. This time is just sufficient for 4-5 experiments. These include specific field assignments to supplement classroom teaching, which is generally followed up by a debate or a group discussion. Assignments in home economics, Games, Case studies and Exercises also form an important part of the whole methodology. However, I found that games have become quite popular as compared to the other methods. My experience over the last few years has shown that students not only find these games and exercises interesting and exiting to play, but they also find that the concepts so delivered is easy to grasp and understand, they also find it easy to retain and recall and that too for a longer period of time. These experiments are a diversion to the students from the routine lecture sessions; they come to students as a refreshing yet purposeful break from normal routine.

I am narrating a few experiments, exercises and games that I have been suing for quite some time now to teach some important concepts in Economics.

1. In the introductory class, students are required to be told the usefulness of economics in their day-to-day life; besides explaining it through examples and lecture, a small exercise is given in the classroom itself. I ask all the students to prepare a list of some items they consume everyday or need everyday. Then they are given different budgets (Income to spend); they are asked to imagine that they are consumers who know the price of the products they listed down approximately, now they are asked to purchase the products that they have listed, with the income allotted to them. Some students find it easy to manage their expenses, while others find that their income is far less than their Expenditure. For both groups, there is a lesson that they need to manage their funds effectively (optimally). In the first case, student obviously opt for savings since all their consumption needs are met; the 2nd set of students find it difficult to manage as they have to other cut on some of their needs by not purchasing the product or they will have to leave it altogether. After this exercise, they understand clearly that when the resources are scarce as compared to their wants they need to choose this choice is based on priority; thus they understand that in order to make a choice they need some help from concepts, and that's what Economics helps them do; make a choice that results in optional allocation of their limited resource. Here the students can be asked whether they would prefer to make their choices themselves or would they allow others to do it for them. Most of the students find that since their priorities are different from others, it is easier and good for them to allocate their own resources to meet their own needs. Here they can be told that they did not make their choice on rankings or in the order they listed the products, nor did they do it on somebody else's priority. Each individual has his own priority as far as allocations of his resources are concerned and the case is same for households, firms or the economy at large. This exercise can be easily converted into a simulation also. This exercise helps the students understand the concept of scarcity, opportunity cost, optimal allocation of resources and many other related concepts after a debriefing is done by the teacher on the various aspects of the exercise.

2. The second exercise used in the classroom is to teach them the demand and supply principles and the elasticity of demand and supply. This can be done in two ways, one simulating a market in the classroom where the entire class gets divided into groups of sellers and buyers of different products or to make it simple there can be one product at a time in the market. Each group is given a maximum price (if they are buyer) and a minimum price (if they are seller) to buy and sell the product(s). Then they are asked to trade, after number of rounds of negotiations and discussion, sooner or later they will reach a point of equilibrium and the sale-purchase activity takes place. Different schedules are given to both groups to enable them reach a point of equilibrium. Then depending on the equilibrium price, the schedule can be changed either for buyers or sellers, where a shift in the demand/ supply curve can be illustrated. The equilibrium price will now change to suit the new schedule. The price of the product only can be changed to illustrate and differentiate movement along the curve and shift in curve. The second option is to give a fieldwork assignment to the students asking them to find out the demand for certain list of products given by the teacher at different levels of price at different places in the city and by different groups represented by different levels of income. This exercise can also be used to illustrate the increase/decrease in demand for one product when the price of the other increase/decrease. This may however be done only if the list of products allotted to students consists of related products. Any of the two methods are found to be useful to explain the concept.

3. Elasticity is a very interesting concept; but generally it is found that students find it difficult to comprehend and do not get the difference between the concept of demand and its elasticity. Therefore, to give a preliminary understanding the concept is explained using rubber bands. Three rubber bands can be taken to the class and an explanation given as to how each of the rubber bands responds to the use of force. The responsiveness of the quantity demanded to a unit change in price can thus be explained relating the force to change in price and the stretch to the elasticity. After demonstrating the preliminary idea/ concept, several items ranging from iodized salt, luxury jewellery watches to trip to Singapore can be listed on the board. Then the students are asked to tell their response if the price of these increases/ decreases (depending on the product) by 10%. Various classifications of elasticity can be thus explained also giving the reasons for such behaviour can be discussed in details explaining the factors influencing elasticity.

4. Another broad area, which students find difficult to conceptualize, is the law of production; students find the topic dry and boring as they find any theory to be completely outside their purview of understanding. However, the topic can be made a memorable and interesting one by adopting a game the class. In some way or the other; this not only helps involvement of students at all levels but also results in breaking the monotony of classroom lectures. In my classroom experiments, I found lot of enthusiasm getting generated in the students especially for this particular experiment. The moment an announcement is made after entering the class that today we will play a 'game', the entire environment in the classroom appears to take a new dimension; each student becomes extra alert to find out what the game is all about and how it is supposed to be played. This is an interesting game, where a small production unit is set up in the classroom itself. A small place in the classroom is allotted, to begin with and termed as the workplace. Students are asked to keep observing and making note of all that they observe. All the students are asked to be alert, as no one knows what is going to happen they all are attentive. Secondly, some items like paper strips, 2 staplers, some stapler pins are shown to them; they are told that the task is to produce bands from the strips of paper by stapling it around; initially one student is asked to come and start the process of production, a fixed time is given. The number of bands produced by the student is then counted and kept aside, and then another student is called to assist the first, then a third, fourth and so on the students are asked to note the total production each time a labour (student) is added. Sooner/ later it is observed by students that the additional product made by the last units if labour (students) is lower than the previous units. The demonstration of the law of diminishing marginal returns thus is the best way of conveying this concept to the students. The law starts operating as students find it extremely difficult to work within the given space and limited capital (stapler). The students would have noted down the total product at each stage, from these observations even average product and marginal product is derived and then curves are drawn; it is seen most of the times that the curves drawn are similar (after smoothing) to the one derived in the law. Further, students are asked to narrate their specific observations in each case, which can be discussed at length. Stages of the law are clearly explained then. Thus, this 30 min exercise is enough for the students to experience the law themselves.

5. A further extension of the above production game can be made where a price is fixed for stapler and place of work (fixed capital), stapler pins, (variable capital), paper strips (raw material) and Labour (students), and the students can then be asked to find the cost of production at each level of production as new labour is added, this is done primarily to understand the various concepts of cost. The concepts of Average Cost (AC), Average Fixed Cost (AFC), Average Variable Cost (AVC), Total Cost (TC) and Marginal Cost (MC) etc. can be thus explained. The difference between the Short run and long run cost curves and the reason for their behaviour is also explained. The price of the end product (bands) can also be fixed to illustrate the revenue concepts. The concepts of profit (total, average and marginal) can be further explained.

The above examples were only illustrative to give an idea of what could be possible with a little change in the way of thinking. Similar exercises can be done for various types of markets, price determination under each of these markets, different strategies of pricing adopted by firms under different circumstances and a host of exercises are done for game theory illustrating pay off, prisoners' dilemma, Nash equilibrium etc.

Most important for any teacher is to keep observing the incidents, aspects, things happening around; keep exploring new ways of doing the same old things. Since concepts change slowly, the way of expressing them should change fast. Never get into a mode of static functioning; once you start innovating do not get into a mode of thinking where you feel this the only and best way of doing it. The more you experiment, more you can innovate, the more innovative you will be more satisfaction you derive that there is something more you have done besides giving a good and interesting lecture. Complementing the content with innovative methods of instruction is imperative. The only way to get satisfaction is to keep observing you will find a whole new world waiting for you. The only key word for success is being innovative.

Dr. G Bharathi
Asst. Professor-Economics
Aurora's Post Graduate College
Chikaddpally, Hyderabad-500 020

Source: E-mail July 10, 2005


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