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Trade-offs and Comparative Advantage

Textbook Chapter: Chapters 2 (Micro & Macro), 7 (Macro) and 9 (Micro)

MobLab Game: Comparative Advantageice discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.

  • Gains from trade (i.e., consumer and producer surplus).
  • Shifts in either supply or demand change equilibrium outcomes.
  • Government Interventions in Competitive Markets

    Textbook Chapter: Chapter 4 (Microeconomics)

    MobLab Game: Competitive Market

    Key Learning Objectives:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Externalities

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Externalities w/Policy Interventions

    Key Learning Objectives:

    • With externalities, the equilibrium of a competitive market without interventions is inefficient.
    • By reducing transactions, a tax can increase efficiency (total surplus) in a market with a negative externality, whereas a subsidy can increase surplus in a market with a positive externality.

    Public Goods

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Public Good: Discrete (Threshold)

    Key Learning Objectives:

    • Highlights the features of public goods: non-rival and non-excludable.
    • Demonstrates the distinction between private and social benefits of public goods.
    • Shows how individual profit maximization leads to the free-rider problem.

    Asymmetric Information (Adverse Selection)

    Textbook Chapter: Chapter 7 (Microeconomics) and Chapter 5 (Macroeconomics)

    MobLab Game: Market for Lemons

    Key Learning Objectives:

    • Experience in a market with asymmetric information.
    • Asymmetric information may lead to adverse selection and market failure.

    Firms in Competitive Markets

    Textbook Chapter: Chapt

    Textbook Chapter: Chapter 3 (Microeconomics & Macroeconomics)

    MobLab Game: Competitive Market

    Key Learning Objectives:

    • The “invisible hand” of the market: how individual profit maximization leads to competitive market equilibrium.
    • Pr

      Textbook Chapter: Chapter 3 (Microeconomics & Macroeconomics)

      MobLab Game: Competitive Market

      Key Learning Objectives:

      • The “invisible hand” of the market: how individual profit maximization leads to competitive market equilibrium.
      • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
      • Gains from trade (i.e., consumer and producer surplus).
      • Shifts in either supply or demand change equilibrium outcomes.

      Government Interventions in Competitive Markets

      Textbook Chapter: Chapter 4 (Microeconomics)

      MobLab Game: Competitive Market

      Key Learning Objectives:

      • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
      • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
      • The difference between tax incidence and who pays the tax.
      • Relative elasticities determine incidence of a tax or subsidy.
      • Excess supply (price floors) and excess demand (price ceilings).
      • The efficiency implications of government interventions.

      Externalities

      Textbook Chapter: Chapter 5 (Microeconomics)

      MobLab Game: Externalities w/Policy Interventions

      Key Learning Objectives:

      • With externalities, the equilibrium of a competitive market without interventions is inefficient.
      • By reducing transactions, a tax can increase efficiency (total surplus) in a market with a negative externality, whereas a subsidy can increase surplus in a market with a positive externality.

      Public Goods

      Textbook Chapter: Chapter 5 (Microeconomics)

      MobLab Game: Public Good: Discrete (Threshold)

      Key Learning Objectives:

      • Highlights the features of public goods: non-rival and non-excludable.
      • Demonstrates the distinction between private and social benefits of public goods.
      • Shows how individual profit maximization leads to the free-rider problem.

      Asymmetric Information (Adverse Selection)

      Textbook Chapter: Chapter 7 (Microeconomics) and Chapter 5 (Macroeconomics)

      MobLab Game: Market for Lemons

      Key Learning Objectives:

      • Experience in a market with asymmetric information.
      • Asymmetric information may lead to adverse selection and market failure.

      Firms in Competitive Markets

      Textbook Chapter: Chapter 12 (Microeconomics)

      MobLab Game: Production, Entry & Exit

      Key Learning Objectives:

      • Short-run profit maximization involves thinking at the margin.
      • In the long-run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

      Oligopoly & Game Theory

      Textbook Chapter: Chapter 14 (Microeconomics)

      MobLab Game: Prisoner’s Dilemma

      Key Learning Objectives:

      • Key features of games: payoff matrices, best responses and dominant strategies.
      • Identification of the Nash equilibrium.
      • The (sometimes) conflicting incentives of cooperation and self-interest.
      • Repeated play may lead to more cooperative outcomes.

      MobLab Game: Ultimatum Game

      Key Learning Objectives:

      • Experience a sequential bargaining game.
      • Norms such as fairness may result in behaviors that deviate from game theoretic predictions.

      Monopoly Pricing

      Textbook Chapter: Chapter 15 (Microeconomics)

      MobLab Game: Cournot (with Group Size=1)

      Key Learning Objectives:

      • Monopolies restrict output in order to increase price.
      • The tension between the quantity price effects of increased output.

      Labor Markets

      Textbook Chapter: Chapter 17 (Microeconomics)

      MobLab Game: Simple Labor Marketibrium.

    • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
    • Gains from trade (i.e., consumer and producer surplus).
    • Shifts in either supply or demand change equilibrium outcomes.

    Government Interventions in Competitive Markets

    Textbook Chapter: Chapter 4 (Microeconomics)

    MobLab Game: Competitive Market

    Key Learning Objectives:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Externalities

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Externalities w/Policy Interventions

    Key Learning Objectives:

    • With externalities, the equilibrium of a competitive market without interventions is inefficient.
    • By reducing transactions, a tax can increase efficiency (total surplus) in a market with a negative externality, whereas a subsidy can increase surplus in a market with a positive externality.

    Public Goods

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Public Good: Discrete (Threshold)

    Key Learning Objectives:

    • Highlights the features of public goods: non-rival and non-excludable.
    • Demonstrates the distinction between private and social benefits of public goods.
    • Shows how individual profit maximization leads to the free-rider problem.

    Asymmetric Information (Adverse Selection)

    Textbook Chapter: Chapter 7 (Microeconomics) and Chapter 5 (Macroeconomics)

    MobLab Game: Market for Lemons

    Key Learning Objectives:

    • Experience in a market with asymmetric information.
    • Asymmetric information may lead to adverse selection and market failure.

    Firms in Competitive Markets

    Textbook Chapter: Chapter 12 (Microeconomics)

    MobLab Game: Production, Entry & Exit

    Key Learning Objectives:

    • Short-run profit maximization involves thinking at the margin.
    • In the long-run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Oligopoly & Game Theory

    Textbook Chapter: Chapter 14 (Microeconomics)

    MobLab Game: Prisoner’s Dilemma

    Key Learning Objectives:

    • Key features of games: payoff matrices, best responses and dibrium.
    • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
    • Gains from trade (i.e., consumer and producer surplus).
    • Shifts in either supply or demand change equilibrium outcomes.

    Government Interventions in Competitive Markets

    Textbook Chapter: Chapter 4 (Microeconomics)

    MobLab Game: Competitive Market

    Key Learning Objectives:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Externalities

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Externalities w/Policy Interventions

    Key Learning Objectives:

    • With externalities, the equilibrium of a competitive market without interventions is inefficient.
    • By reducing transactions, a tax can increase efficiency (total surplus) in a market with a negative externality, whereas a subsidy can increase surplus in a market with a positive externality.

    Public Goods

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Public Good: Discrete (Threshold)

    Key Learning Objectives:

    • Highlights the features of public goods: non-rival and non-excludable.
    • Demonstrates the distinction between private and social benefits of public goods.
    • Shows how individual profit maximization leads to the free-rider problem.

    Asymmetric Information (Adverse Selection)

    Textbook Chapter: Chapter 7 (Microeconomics) and Chapter 5 (Macroeconomics)

    MobLab Game: Market for Lemons

    Key Learning Objectives:

    • Experience in a market with asymmetric information.
    • Asymmetric information may lead to adverse selection and market failure.

    Firms in Competitive Markets

    Textbook Chapter: Chapter 12 (Microeconomics)

    MobLab Game: Production, Entry & Exit

    Key Learning Objectives:

    • Short-run profit maximization involves thinking at the margin.
    • In the long-run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Oligopoly & Game Theory

    Textbook Chapter: Chapter 14 (Microeconomics)

    MobLab Game: Prisoner’s Dilemma

    Key Learning Objectives:

    • Key features of games: payoff matrices, best responses and dominant strategies.
    • Identification of the Nash equilibrium.
    • The (sometimes) conflicting incentives of cooperation and self-interest.
    • Repeated play may lead to more cooperative outcomes.

    MobLab Game: Ultimatum Game

    Key Learning Objective Objectives:

    • With externalities, the equilibrium of a competitive market without interventions is inefficient.
    • By reducing transactions, a tax can increase efficiency (total surplus) in a market with a negative externality, whereas a subsidy can increase surplus in a market with a positive externality.

    Public Goods

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Public Good: Discrete (Threshold)

    Key Learning Objectives:

    • Highlights the features of public goods: non-rival and non-excludable.
    • Demonstrates the distinction between private and social benefits of public goods.
    • Shows how individual profit maximization leads to the free-rider problem.

    Asymmetric Information (Adverse Selection)

    Textbook Chapter: Chapter 7 (Microeconomics) and Chapter 5 (Macroeconomics)

    MobLab Game: Market for Lemons

    Key Learning Objectives:

    • Experience in a market with asymmetric information.
    • Asymmetric information may lead to adverse selection and market failure.

    Firms in Competitive Markets

    Textbook Chapter: Chapter 12 (Microeconomics)

    MobLab Game: Production, Entry & Exit

    Key Learning Objectives:

    • Short-run profit maximization involves thinking at the margin.
    • In the long-run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Oligopoly & Game Theory

    Textbook Chapter: Chapter 14 (Microeconomics)

    MobLab Game: Prisoner’s Dilemma

    Key Learning Objectives:

    • Key features of games: payoff matrices, best responses and dominant strategies.
    • Identification of the Nash equilibrium.
    • The (sometimes) conflicting incentives of cooperation and self-interest.
    • Repeated play may lead to more cooperative outcomes.

    MobLab Game: Ultimatum Game

    Key Learning Objective Objectives:

    • With externalities, the equilibrium of a competitive market without interventions is inefficient.
    • By reducing transactions, a tax can increase efficiency (total surplus) in a market with a negative externality, whereas a subsidy can increase surplus in a market with a positive externality.

    Public Goods

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Public Good: Discrete (Threshold)e ceilings).

  • The efficiency implications of government interventions.
  • Externalities

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Externalities w/Policy Interventions value created by the last worker hired.

    Unemployment

    Textbook Chapter: Chapter 9 (Macroeconomics)

    MobLab Game: Simple Labor Marketternality, whereas a subsidy can increase surplus in a market with a positive externality.

    Public Goods

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Public Good: Discrete (Threshold)put in order to increase price.

  • The tension between the quantity price effects of increased output.
  • Labor Markets

    Textbook Chapter: Chapter 17 (Microeconomics)

    MobLab Game: Simple Labor Marketquilibrium.

  • Price discovery: the equilibrium market-clearing price results from the valuations of different buyers and costs of different sellers.
  • Gains from trade (i.e., consumer and producer surplus).
  • Shifts in either supply or demand change equilibrium outcomes.
  • Government Interventions in Competitive Markets

    Textbook Chapter: Chapter 4 (Microeconomics)

    MobLab Game: Competitive Market

    Key Learning Objectives:

    • Government interventions (per-unit taxes, subsidies, price ceilings and floors) alter equilibrium outcomes.
    • Equilibrium outcomes do not depend on whether buyers or sellers pay the tax.
    • The difference between tax incidence and who pays the tax.
    • Relative elasticities determine incidence of a tax or subsidy.
    • Excess supply (price floors) and excess demand (price ceilings).
    • The efficiency implications of government interventions.

    Externalities

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Externalities w/Policy Interventions

    Key Learning Objectives:

    • With externalities, the equilibrium of a competitive market without interventions is inefficient.
    • By reducing transactions, a tax can increase efficiency (total surplus) in a market with a negative externality, whereas a subsidy can increase surplus in a market with a positive externality.

    Public Goods

    Textbook Chapter: Chapter 5 (Microeconomics)

    MobLab Game: Public Good: Discrete (Threshold)

    Key Learning Objectives:

    • Highlights the features of public goods: non-rival and non-excludable.
    • Demonstrates the distinction between private and social benefits of public goods.
    • Shows how individual profit maximization leads to the free-rider problem.

    Asymmetric Information (Adverse Selection)

    Textbook Chapter: Chapter 7 (Microeconomics) and Chapter 5 (Macroeconomics)

    MobLab Game: Market for Lemons

    Key Learning Objectives:

    • Experience in a market with asymmetric information.
    • Asymmetric information may lead to adverse selection and market failure.

    Firms in Competitive Markets

    Textbook Chapter: Chapter 12 (Microeconomics)

    MobLab Game: Production, Entry & Exit

    Key Learning Objectives:

    • Short-run profit maximization involves thinking at the margin.
    • In the long-run equilibrium of a competitive market with identical firms, all firms earn zero economic profits.

    Oligopoly & Game Theory

    Textbook Chapter: Chapter 14 (Microeconomics)

    MobLab Game: Prisoner’s Dilemma

    Key Learning Objectives:

    • Key features of games: payoff matrices, best responses and dominant strategies.
    • Identification of the Nash equilibrium.
    • The (sometimes) conflicting incentives of cooperation and self-interest.
    • Repeated play may lead to more cooperative outcomes.

    MobLab Game: Ultimatum Game

    Key Learning Objectives:

    • Experience a sequential bargaining game.
    • Norms such as fairness may result in behaviors that deviate from game theoretic predictions.

    Monopoly Pricing

    Textbook Chapter: Chapter 15 (Microeconomics)

    MobLab Game: Cournot (with Group Size=1)

    Key Learning Objectives:

    • Monopolies restrict output in order to increase price.
    • The tension between the quantity price effects of increased output.

    Labor Markets

    Textbook Chapter: Chapter 17 (Microeconomics)

    MobLab Game: Simple Labor Market

    Key Teaching Points:

    • In a competitive labor market, equilibrium wage is equal to the value created by the last worker hired.

    Unemployment

    Textbook Chapter: Chapter 9 (Macroeconomics)

    MobLab Game: Simple Labor Market

    Key Teaching Points:

    • Employment levels are determined by both the supply and demand of labor.
    • Policies such as a minimum wage or unemployment insurance affect structural unemployment.

    Money and Banks

    Textbook Chapter: Chapter 10 (Macroeconomics)

    MobLab Game: Bank Run

    Key Learning Objectives:

    • Highlights the underlying concept of fractional banking.
    • Demonstrates the trade-off between profit and risk, and shows how bank runs may arise.
    • Policy interventions, such as deposit insurance, can reduce the possibility of bank runs.
    1. Microeconomics and Macroeconomics, both 5th editions.