- Session Title: Microeconomics Discussion: Price Elasticity through Paired Problem-Solving
- Learning Outcomes (5-minute review):
* Students will be able to define and calculate price elasticity of demand, supply, income, and cross-price elasticity. * Students will be able to interpret elasticity coefficients and explain their implications for firm behavior and government policy. * Students will be able to apply elasticity concepts to analyze real-world market scenarios.
- Pre-Work (Assigned before session):
* Review Chapter 5 on Elasticity from the main textbook. * Complete Problem Set 3, focusing on conceptual questions related to elasticity. * Re-read lecture notes on the midpoint formula and factors influencing elasticity.
- Opening (5 minutes):
* Welcome students to the ECON 101: Introduction to Microeconomics discussion section. Briefly outline today's agenda: a quick review, paired problem-solving, and a group discussion on price elasticity. * Quick review: "What is price elasticity, and why is it important for understanding market responses?" Briefly touch on the difference between elastic and inelastic demand/supply.
- Core Segments (35 minutes):
* Concept Reinforcement (10 minutes): * Q&A: "Can someone explain the difference between a movement along a demand curve and a shift of the demand curve, in the context of elasticity?" * "Why is the sign of the cross-price elasticity important for classifying goods?" * Clarify common misconceptions, e.g., confusing slope with elasticity. * Active-Learning Task: Paired Problem-Solving (20 minutes): * Instructions: Students will work in pairs. Each pair will receive 2-3 short problems. Their task is to calculate the relevant elasticity, interpret the result, and discuss the implications. * Problem 1: If the price of a local coffee shop's latte increases by 10% and the quantity demanded falls by 15%, calculate the price elasticity of demand. Is demand elastic or inelastic? * Problem 2: Consider the market for gasoline demand (gasoline demand). If the government imposes a new tax on gasoline, how might the elasticity of demand for gasoline impact the incidence of this tax on consumers versus producers in the short run versus the long run? Discuss factors that influence gasoline's elasticity. * Problem 3: A local bakery observes that when the price of their specialty bread increases by 5%, the demand for their muffins increases by 2%. Calculate the cross-price elasticity of demand between bread and muffins. Are they substitutes or complements? * Circulate among pairs, offering guidance, asking probing questions, and noting common areas of difficulty. * Group Share & Discussion (5 minutes): * Call on 1-2 pairs to present their solution to Problem 2 (gasoline demand) or discuss a particular challenge they encountered. * Facilitate a brief whole-group discussion: "What did you find most surprising about the elasticity calculations?" or "How might a firm use elasticity information for pricing strategies?"
- Informal Assessment/Wrap-up (5 minutes):
* "One-minute paper": On an index card or scrap paper, students write down one key concept they feel more confident about regarding elasticity, or one lingering question they have. Collect these to gauge understanding. * Reiterate the session's learning outcomes and how today's activities helped achieve them.
- Follow-Up Readings/Homework:
* Review practice problems 5.1-5.3 in the textbook. * Read the article "Elasticity of Demand for Health Care" (provided link on LMS). * Prepare for next week's topic on market efficiency.