Vol. 16, No. 1 (Winter 2017)

Editorial Staff Volume 16 Winter 2017 Number 1 Editor: Joshua Hall, West Virginia University <1> Economics of the World beyond the Textbook: Two Methods for Senior Editors: Teaching Richard J. Cebula, Jacksonville University Joy A. Buchanan and Steven Gjerstad Luther Lawson, University of North Carolina‐ Wilmington <7> Presenting Economic Sanctions in the Classroom: The Case of Co‐Editors (Economics): Iran Adam Hoffer, University of Wisconsin – La Crosse Toni Sipic and Bob Carbaugh Co‐Editors (Finance): <19> Teaching Collective Action Problems without Contextual Bias: Bill Z. Yang, Georgia Southern University The Red/Green Simulation Assistant Editors: James R. Bruehler, Alan P. Grant, and Linda S. Ghent Gigi Alexander, Jacksonville University Robert Houmes, Jacksonville University <28> Shifts in Supply and Demand and the Corresponding Changes Board of Editors (Economics): in Equilibrium Price and Quantity: Explaining the Process Steven Caudill, Rhodes College Gary M. Galles and Robert L Sexton Joy Clark, Auburn University at Montgomery <33> What Cosmo Kramer Can Teach Us About Optimal Stopping David Colander, Middlebury College Times Stephen Conroy, University of San Diego Joshua R. Hendrickson Mike Daniels, Columbia State University Paul Grimes, Pittsburg State University <40> Honor Codes and Perceptions of Cheating John Marcis, Coastal Carolina University Robert T. Burrus, Jr., J. Edward Graham, Adam T. Jones, Kim Marie McGoldrick, University of Richmond and William H. Sackley Franklin Mixon, Jr., Columbus State University Usha Nair‐Reichert, Georgia Tech <54> Financial Literacy in the Community College Classroom: A Inder Nijhawan, Fayetteville State University Curriculum Intervention Study Carol Dole, Jacksonville University Erin A. Yetter and Mary Suiter James Payne, Georgia Colleges & State University <70> Using Bloomberg Terminal in Corporate Finance Courses Christopher Coombs, LSU ‐ Shreveport Qian Li and Jinghua Wang Jason Beck, Armstrong Atlantic State University Board of Editors (Finance): <83> Portfolio Optimization Incorporating the Capital Allocation Robert Boylan, Jacksonville University Line: A Comprehensive Undergraduate Investments Course Project Kam (Johnny) Chan, Western Kentucky University Pamela M. LaBorde S. J. Chang, Illinois State University <102> A Pedagogical Note on the Dynamics of Capital Market Edward Graham, University of North Carolina at Efficiency for the Introductory Finance Course Wilmington John Griffin, Old Dominion University John T. Rose Srinivas Nippani, Texas A&M University ‐ Commerce Academy of Economics and Finance Mario Reyes, University of Idaho William H. Sackley, University of North Carolina at Wilmington Barry Wilbratte, University of St. Thomas Bob Houmes, Jacksonville University Shankar Gargh, Holkar Science College, India Shelton Weeks, Florida Gulf Coast University Production Editor: Doug Berg, Sam Houston State University JOURNAL OF ECONOMICS AND FINANCE EDUCATION ∙ Volume 16 ∙ Number 1 ∙ Winter 2017 Economics of the World beyond the Textbook: Two Methods for Teaching Joy A. Buchanan1 and Steven Gjerstad2 Abstract Visiting historical sites, local markets, or businesses can help students in an economics class connect abstract ideas to three-dimensional realities. We relate our experience with two types of trips: one focused on regional history and one in which students visited representative businesses. With some guided questions, the students are able to identify the forces of supply and demand at work in their own lives and communities. Introduction Some students struggle to understand the concepts in economics principles classes. Even a student who can successfully answer typical test questions about the supply and demand model may not realize that it describes how prices form in the city he or she actually lives in. We suggest a method for helping students to see how the information and graphs on a two-dimensional textbook page connect to a three-dimensional world. There are two types of trips that we describe with examples. First, a teacher can help students see the economic forces that are at work in shaping the dominant local industry near their school. Second, any place of business or market that the students participate in outside of class can be examined through the lens of economics. We suggest questions and assignments that help students get the most out of visiting sites of economic importance. The examples we provide are not courses that are commonly termed “study abroad”, although there is a literature on international trips for economics classes. McCannon (2011) describes a trip to Austria which enhanced a course on Austrian Economics. Wright and Hind (2011) took students to Gambia to learn about the economics of the tourism industry. Smith (2007) describes “extended field trips” that closely match the scale and format of our excursions. Two other sources for learning by experience explain how to adapt museum trips to college economics classes (Das 2015) and how to buy real emissions allowance permits online with an environmental economics class (Lewis 2011). The Economic History of Your City Why is this city here? If this city was a country, what would we export in order to buy food? Many communities can trace their origin back to an industrial or agricultural boom. Although that industry is often no longer the main source of income, the effect of shifts in population and construction are still visible. The forces of supply and demand impelled people and products across great distances and beat down roads where there used to be wilderness. Emigrants’ surplus production was traded for consumer goods (that now make so many cities indistinguishable from each other). This epic story can be told using local landmarks in such a way that helps students appreciate the pervasive and powerful effect of market exchange and individual choice that shapes nations and allows people to better their lives. 1 Assistant Professor of Quantitative Analysis and Economics, Brock School of Business, Samford University, 800 Lakeshore Drive, Birmingham, AL 35229, [email protected] 2 Presidential Fellow, Chapman University, Orange, CA 92866 - USA 1 JOURNAL OF ECONOMICS AND FINANCE EDUCATION ∙ Volume 16 ∙ Number 1 ∙ Winter 2017 Our own experience with teaching students in Southern California about the Gold Rush should serve to illustrate the potential of this exercise. Please note that although we spent considerable resources on a week- long trip with the students, this technique does not require overnight stays or expensive outings. History is not separate from economics, although they are usually taught in separate campus buildings. The history of a population center can be described as the movement toward a resource of value that was then traded with other population centers. In the case of the American West, this resource is especially easy to identify as gold. If it weren’t for the people going west to find gold and the financial surplus from the metals unearthed, the industrialization of the West would have occurred much more slowly. Students were surprised to learn that the best way to get rich during the Gold Rush was to move to California and start a store or a hotel that served the miners. The financing of mining operations and international trade illustrated timeless lessons about financing and international trade everywhere. Economic development of California was rapid, colorful, and unusual. By 1848, after more than two centuries of growth and development, the American frontier had been moved less than 1200 miles west from the eastern seaboard to Independence, Missouri. After the gold discovery at Sutter’s Mill, in only four years 120,000 people made the 1,800 mile overland journey from Missouri to California across some of the most forbidding terrain in North America. After the difficult journey, emigrants reached an isolated destination far from the sources of the products needed for their new homes and enterprises. We described the history3 of this rapid and isolated economic development with first-hand accounts of the gold fields in 1848 and the emigration that followed as well as readings on the growth of agriculture, the transportation network, the development of new mining technology, and Californians’ trade relations in the early years of statehood. Every regional economy has its own development patterns. Much can be learned about economic development by studying their histories. First-hand historical accounts of people living in the state your university happens to be in are full of economic insights. We had the students read an account from Walter Colton (1850), a community leader in Monterey, California during the Gold Rush. His journal was both entertaining and educational. In the appendix, we provide a sample excerpt and questions we used to direct reading of Colton. Travel courses at Chapman take place during “interterm,” which is a 4-week course that typically starts on the first Monday after New Year’s Day. Our course involved three weeks of classroom instruction on the economic principles that affected the development of California during the gold rush followed by a week- long trip through Death Valley National Park. There are several sites where we could see abandoned mining equipment and observe the local economy. The students enjoyed camping and experiencing a new place. It was also an economical way to conduct a travel course. Many travel courses at Chapman cost $5,000 plus airfare and meals, and involve exotic destinations such as the Galapagos

Load more