Pedagogical Tools for Teaching Supply and Demand Using Lessons from Transitional Economies
The typical method of presenting supply and demand in high school classes often leaves students with an impression that markets are simple and function effortlessly. In reality, the effectiveness of markets depends on the quality of complex institutions such as private property and property-rights enforcement. Students often do not realize that markets and the institutions that support them are man-made and do not function automatically. The authors offer pedagogical tools and speaking points that allow teachers to dispel these notions while helping students appreciate the complexity of the market system. Discussion of supply and demand is combined with lessons learned from former centrally planned economies to provide students with a deeper understanding of the market system and how it differs from central planning. Examples and anecdotal evidence are drawn from the first author's experiences in communist Czechoslovakia.