The Educational Choice Anomaly for Principles Students: Using Ordinary Supply and Demand Rather than Indifference Curves

The surprise value of many economic observations makes the economics discipline quite interesting for many students. One such anomaly is that providing “free” education in an effort to reduce the number of dropouts can often result in a lower level of educational quality purchased. This result is easy to show with indifference curves, but many instructors of introductory courses do not introduce this analytical technique. As a consequence, a result that many students find quite interesting is seldom presented. The authors show that it is easy to clarify the educational choice anomaly with ordinary supply and demand curves. Moreover, the exercise of doing so provides students with a greater understanding of benefit/cost analysis as well as consumer and producer surplus.