Teaching Supply and Demand in an Institutional Framework

25 Pages Posted: 14 Apr 2005

See all articles by Melanie Marks

Melanie Marks

Longwood College - College of Business and Economics

Roman Cech

Longwood College

Date Written: March 21, 2005

Abstract

In this article we show how teaching the fundamentals of supply, demand and the market equilibrium can be enhanced by including lessons from transition countries, in which markets did not exist less than two decades ago and the market institutions are still being built. We draw upon the experience of transition economies to show how sensitive the functioning of markets is to the quality of institutions like private property, property rights enforcement, competitive environment and social safety net. We suggest that selected aspects of transition should be incorporated right at the beginning of a microeconomics course, where they add value and fit well with main thrust of the supply, demand and market equilibrium topic. We use anecdotal evidence accompanied by simple diagrams to illustrate the institutional background of a market economy. The result is a ready-to-use set of tools instructors can use to enhance their lectures.

JEL Classification: A22

Suggested Citation

Marks, Melanie and Cech, Roman, Teaching Supply and Demand in an Institutional Framework (March 21, 2005). Available at SSRN: https://ssrn.com/abstract=694201 or http://dx.doi.org/10.2139/ssrn.694201

Melanie Marks (Contact Author)

Longwood College - College of Business and Economics ( email )

Farmville, VA
United States
434-395-2372 (Phone)
434-395-2203 (Fax)

Roman Cech

Longwood College ( email )

Farmville, VA
United States
434-395-2160 (Phone)
434-395-2160 (Fax)

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