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Small Group Discussions

I have typically used the method detailed below in upper division courses with between 15-20 students. This past semester, I began using it more frequently in a Principles of Microeconomics class with an enrollment of 40, though usually no more than 35 were there for a given small group.

Participation in small group discussion is required. Students are allowed to miss one without penalty. In addition, missed discussions must be made up with a written assignment or else the final course score is lowered.

Uses for Small Group Discussion

  • As an “ice breaker” on the first day of class. Introduces them (in an intro class) or get them back into (in an upper-division) “thinking like an economist”.
  • Prior to introducing a topic so that students can explore issues on their own first.
  • To apply concepts already learned in a new context.


  • More democratic participation
    • Draws students out who might not usually participate
    • More students are able to participate in a shorter amount of time
  • Builds oral communication skills in economics
    • Students must explain their ideas to others
    • Students practice verbalization of concepts and issues
  • Helps to identify when students misunderstand concepts
  • Greater engagement, more lively classes

Keeping Students Focused

Students are divided into groups of 3 to 4. I assign groups randomly each time so that the groups change. Divide the number of students in the class that day by the target group size (3 or 4) and round down. Then count students out to that number, repeating. 1’s are in a group, 2’s, etc.

Students are given a set of questions to guide their discussion and then turn in a sheet with notes at the end with all of their names. Not all that they discuss will make it onto the write-up sheet, but I have found that turning in notes helps to keep them focused during the discussion.

I have a set of topics that I normally use and then I sometimes add ones based on current events as appropriate (the California energy crisis was a good first day small group discussion for Environmental Economics).

Giving feedback, guiding discussion

I circulate among the groups during discussion. After they finish their discussion (or sometimes at the beginning of the next class if they go to the end), we sum-up in a large group discussion, consolidating their ideas. This is also a good time to emphasize important points, especially if there were common misunderstandings evident in the discussions.


I. Economics of Poverty and Discrimination

A. Minimum Wage (also used for Labor Economics)

1. What affects the magnitude of job loss resulting from an increase in the minimum wage?
2. What must be true about the elasticity of demand for the total $ going to these workers to increase?
3. What types of information would you want to know if you were to make a normative judgment about increasing the minimum wage?

B. Introduction to Poverty (also used in Principles of Microeconomics)

1. What is poverty?
2. How would you construct a measure of it? What kind of information or data would you request and how would you use it to identify/classify who is poor?
3. How much do you think a family of 2 adults and 2 children need to just get by?

[Note: Q2 is an example of purposeful ambiguity. Students are left to think about whether poverty should be measured at the individual or household level in addition to what information should be included in the measure.]

C. National Academy of Sciences Proposed Poverty Measures

1. How do you think switching to the NAS proposed measure would change (a) the rate and trend (b) the composition of the poverty population?

[This is followed up with the presentation of results from a paper investigating this.]

II. Health Economics

A. Insurance and Adverse Selection

Assume that there are two types of people: Type As who are more likely to get a disease, and Type Bs who are less likely to get a disease.

1. Assume first that people do not know what type they are. Will people purchase insurance? Why?
2. Now assume that people know what type they are but insurance companies are unable to find out this information. Will both types be likely to purchase equal amounts of insurance? Is there an adverse selection problem? Will Type As buy insurance? Type Bs?
3. Now assume that insurance companies can determine an individual's type by administering an inexpensive test. Will there be an adverse selection problem? Who will benefit from this change?
4. Now assume a widely available inexpensive test is developed that determines with certainty whether an individual will get sick or not. What will happen to the insurance market after this test is developed? Who will benefit from this development?

B. Hospital Ownership

How do hospitals that are for-profit, not-or-profit or public differ? How do you think it affects behavior? Sometimes a hospital will change type (for example, converting from not-for-profit to for-profit status). When do you think these conversions are more likely? What changes in outcome/behavior would you predict?

[This is followed up with a presentation of a paper examining the determinants and effects of conversions.]

III. Environmental Economics

A. Addressing global warming

1. On efficiency grounds, where should cuts in greenhouse gases be made?
2. On "fairness" grounds, where should cuts be made?
3. Why is it important that developing countries be involved in international pollution reduction negotiations?
4. Why might international greenhouse gas reduction be a good candidate for tradable permits solutions?
5. What are likely problems with this approach?

B. First day of class -- California electricity crisis

1. What do you know about the details of the “crisis”?
2. What are causes/contributing factors that you have heard of?
3a. What is price gouging? ("conventional wisdom" versus "economist" definition)
3b. How can you tell if there is "gouging", according to the economist definition? What kind of evidence would you look for?

C. Locally Undesirable Land Use

A community is deciding where to build a new landfill (it has been determined that the average benefits exceed the average costs of the landfill). The current proposed site is near a poorer area of town.

Evaluate the proposal using Pareto efficiency, potential Pareto efficiency, and the Harberger criterion. Under what circumstances would the policy improve efficiency in each case?

IV. Principles of Economics

Compare Progressive, Flat, and Lump-Sum Taxes on Efficiency, Fairness, and Simplicity.

[Note: This can lead to a discussion of differing opinions on what is fair. Groups will differ on which they think is the most fair.]

Newspaper and other articles

These can be great sources for discussion, especially when they illustrate misunderstandings of basic principles. Here is a topic based on an email I found that was good for critique (not all that complex, but amusing). I used this on the first day in Principles class (and once in Environmental Economics with more in depth discussion questions).

Learning to think like an economist…

Last April, some people proposed another "gas out" (see below). How successful is the proposed plan likely to be? Discuss. What other actions that might be effective?

Email received early April 2000:

Subject: Gas Out ~ April 7-9th

Last year on April 30,1999, a gas out was staged across Canada and the U.S. to bring the price of gas down, and it worked. It's time to do something about it again. Only this time lets make it for three days instead of just one. The so-called oil cartel decided to slow production to drive up gasoline prices. Lets see how many Canadian\American people we can get to ban together for a three day period in April, NOT TO BUY ANY GASOLINE, during those three days. LETS HAVE A GAS OUT. Do not buy any gasoline from APRIL 7, 2000, THROUGH APRIL 9, 2000. Buy what you need before the dates listed above, or after, but try not to buy any during the GAS OUT.

See also: the Handbook chapters on Case Studies and Seminars

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