The Educational Choice Anomaly for Principles Students: Using Ordinary Supply and Demand Rather than Indifference Curves

5 Pages Posted: 11 Jan 2010

See all articles by Philip E. Graves

Philip E. Graves

University of Colorado at Boulder - Department of Economics

Robert L. Sexton

Pepperdine University - Economics Department

Multiple version iconThere are 2 versions of this paper

Date Written: January 8, 2010

Abstract

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

Graves, Philip E. and Sexton, Robert L., The Educational Choice Anomaly for Principles Students: Using Ordinary Supply and Demand Rather than Indifference Curves (January 8, 2010). Available at SSRN: https://ssrn.com/abstract=1533484 or http://dx.doi.org/10.2139/ssrn.1533484

Philip E. Graves (Contact Author)

University of Colorado at Boulder - Department of Economics ( email )

Campus Box 256
Boulder, CO 80309-0256
United States

Robert L. Sexton

Pepperdine University - Economics Department ( email )

24255 Pacific Coast Highway
Malibu, CA 90263
United States

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