Educational Technology in Economics Instruction

In this paper, we will show, in the context of a “market equilibria” example, how the use of educational technology associated with system dynamics makes it possible for instructors to teach undergraduate students topics of economic structures/processes involving nonlinearity, stochasticity, non-differentiability and discontinuity. We present three submodels/subcases associated with the example. In the first model, we have continuous and continuously differentiable linear demand and nonlinear supply functions for a good. Each function involves a stochastic term. In the second model, we do not have a continuous and continuously differentiable demand function but only a demand schedule. The supply function is a continuous nonlinear function of price. In the third model, we have interrelated markets for two goods with discontinuous stochastic demand and nonlinear stochastic supply functions. In all cases, we use system dynamics to find, in a very simple and user-friendly manner, the dynamic equilibrium paths and hence dynamic equilibria in the markets in question.