Question

How do you teach the model of the market (Supply & Demand)?

Answer 1

To start the discussion of the question I asked, I use the following Pedagogy:

1.  I introduce the overview of the model (basic assumptions of a purely competitive market, that it integrates concepts of supply and demand & that there is an equilibrium)
2.  I introduce the law of demand, build a market demand curve, then introduce law of supply, build a market supply curve
3.  Equilibrium as a static concept - including what happens to equilibrium quantity & price when there is an incr/decr in demand or incr/decr in supply
4.  Equilibrium as a flow concept - how the market moved from an old equilibrium to a new equilibrium (including a brief discussion whether in the real world a market will reach equilibrium
5.  A discussion of the specific determinants of demand and determinants of supply.

This is a bit unusual approach, but I have found over the years that the typical pedagogy in which the determinants are introduced before equilibrium ends up confusing many students because they get so tied up in trying to understand what the "outcomes" are for any particular determinant change that they lose focus on the basic operation of the model (in other words, they lose the forest from the trees).  I've found that if I can get them to understand the basic dynamics/overall model first, then they understand what the determinants (when they change) really do.

Answer 2

I like the idea of running an in-class experiment/demonstration of the repeated double auction, of the kind made famous by the work of Vernon Smith and Charlie Plott.

Years ago I used to do this by passing out index cards which instructed each student whether he/she was a buyer or seller, of how many units, at what reserve prices, but these days there is a variety of software to make it easy.

I'm a fan of (and an advisor to) Moblab, and here's the link to their classroom double auction game:
https://www.moblab.com/games/continuous-market-game/

Often the results appear chaotic to the class while the auction is going on, which makes it all the more impressive to show how (with repetition) the results converge to the competitive equilibrium...

Answer 3

Hello, what seems to be engaging and empowering is to use actual data for product types that student's can appreciate -- usually consumer durables.
In the U.S., this is from the BEA and some series can be downloaded from FRED. The Section 2 underlying detail is the most practical as it is most familiar to students as real products they buy. Eurostat, UK, and other countries have convenient data access. Other countries, like Japan, have spreadsheets that are reasonably user-friendly. Students can start with U.S. data as is it most detailed and then use home country data.
Importantly, data needs be from from the UN SNA-based national accounting, so that they are matched price-quantity data series.
This enables students to plot Econ 101-style price-quantity charts with real data. This also enables students to easily see (at least in industrial countries) how the long run curve went from upward-sloping to downward-sloping in the mid 1990s. Coincidentally, this is just before most of today's students where born, so they can also anchor in their history.
Discussion topics include:
* How global tech and trade has been driving down product costs per decade -- a nice bridge to microeconomics
* Outside of industrial countries, they can compare their local price trends to U.S. price trends and then discuss the specific causes of the differences.
* It can be empowering because students are actually working with data, not just theory, given them a sense of discovery especially if they explore different product types. It might also encourage students to pursue graduate work in line with the AEA's effort to promote such career paths.
Hope this helps.