The typical profit-maximization solution for the joint-production problem found in intermediate texts, managerial texts, and other texts concerned with optimal pricing is oversimplified and inconsistent with profit maximization, unless there is either no excess of any of the joint products or no costs associated with dumping. However, it is an…

Authors of intermediate microeconomics textbooks devote relatively more space to imperfectly competitive markets than can be justified by their relative occurrence in actual markets. This gap has persisted for at least 40 years, even with an almost complete turnover of authors between the decades of the 1960s and the 2000s. This portrayal gives…

Third-degree price discrimination is taught in almost every intermediate microeconomics class. The theory, geometry, and the algebra behind the concept are simple, and the phenomenon is commonly associated with the sale of many of the goods and services used frequently by students. Classroom discussion is usually vibrant as students can relate…

The authors argue that the textbook treatments of the constant term in regression analysis vary extensively and are often neglectful, incomplete, or even incorrect. Given the potential importance of the constant coefficient in theoretical and applied work, they develop the factors biasing the estimation of the constant term to support the argument…

Many introductory microeconomics textbook authors derive the law of demand from the assumption of diminishing marginal utility. Authors of intermediate and graduate textbooks derive demand from diminishing marginal rate of substitution and ordinal preferences. These approaches are not interchangeable; diminishing marginal utility for all goods is…

The authors propose a pedagogical apparatus embodying a solid micro-foundation with emphasis on the public's choice between currency and demand deposits being an optimal decision. On the basis of the pedagogical exposition, the authors explain how money supply is related to the combined behaviors of the central bank, commercial banks, and the…

Explains that the endogeneity of the efficient frontier in the mean-variance model of portfolio selection is commonly obscured in portfolio selection literature and in widely used textbooks. Demonstrates endogeneity and discusses the impact of parameter changes on the mean-variance efficient frontier and on the beta coefficients of individual…

Presents a rigorous version of the model of an increasing-cost competitive industry. Explains that in this model firms are infinitesimal, which justifies price-taking behavior and a continuous industry supply curve. Shows that the industry supply curve slopes upward because of dispersion in the efficiency of firms. Emphasizes role of marginal…

States that co-operative (co-op) economics organizations are ignored in economic introductory textbooks in North America and provides evidence for this assertion. Addresses how to deal with this form of economic organization. Argues that asking who makes the decisions in firms and why, using co-ops as an example, raises important questions. (CMK)

Discusses a strategy for teaching students about how the Social Security Trust Fund works. Explains that a flow chart is presented to the students; four terms are defined (deficit, surplus, debt, and reserve); and a new graph is prepared to show the paths of these four variables. (CMK)

Focuses on the IS-LM model providing a graphical analysis designed to clarify the confusion induced by misleading statements in several major macroeconomics textbooks concerning the connection between policy effectiveness and the slopes of the IS and LM curves. Includes references. (CMK)

Discusses an electronic textbook called "Essential Principles of Economics." Explains that economic concepts are found by following links from the table of contents, while each chapter includes both expository information and interactive material including online multiple-choice drill questions. States that the textbook is a "work in progress."…

Explores the importance of second-order conditions in the cost-minimization problem confronting the monopsonistic employer of factor inputs. Describes an alternative approach to the presence of pecuniary effects that does not depend on the assumption that firms are monopsonistic in factor markets. (CMK)

Updates a study of the coverage of entrepreneurship contained in principles of economics textbooks originally carried out in the mid-1980s. Analyzes coverage of the same topics in 14 popular introductory texts. Concludes that entrepreneurship still has not worked its way into economics-principles texts. (DSK)

Provides comments by Nobel laureate Paul A. Samuelson, Harold W. McGraw Jr., William D. Nordhaus, Orley Ashenfelter, Robert M. Solow, and Stanley Fischer on Samuelson's introductory textbook "Economics," as presented at the 1998 American Economic Association meetings in Chicago (Illinois). (CMK)