The Educational Choice Anomaly for Principles Students: Using Ordinary Supply and Demand Rather than Indifference Curves
5 Pages Posted: 11 Jan 2010
Date Written: January 8, 2010
The “surprise value” of many economic observations makes our discipline quite interesting for many students. One such anomaly is that providing “free” education in an effort to reduce the number of drop-outs can often result in a smaller amount of education purchased. This result is very easy to show with indifference curves, but many instructors of introductory courses do not introduce this analytical technique. As a consequence, a result that many students find quite interesting is seldom presented. We show here that it is very easy to clarify the educational choice anomaly with ordinary supply and demand curves; moreover, the exercise of doing so provides students with greater understanding of benefit/cost analysis as well as consumer and producer surplus.
Keywords: Educational choice, “drop-outs,” subsidized education
JEL Classification: A1, A2, D1, I2, I3
Suggested Citation: Suggested Citation