Explore economic concepts through guided scenarios, dynamic graphs, and immediate feedback.
Positive and negative production and consumption externalities
Launch: Open Externalities Practice
Work through a random set of externality scenarios one step at a time. Identify who creates the spillover, whether it helps or harms third parties, how the social curve differs from the private curve, whether the market produces too much or too little, and which policy moves the market toward the social optimum.
Consumer choice, budget lines, indifference curves, and demand
Launch: Open Demand Curve Practice
Work through three random consumer scenarios to derive a demand curve from utility-maximizing choices. The exercise uses interactive graphs and guided questions to connect changes in a good's price with budget lines, optimal bundles, and movements along the demand curve.
The production possibilities frontier for health and home goods in the Grossman model
Launch: Open Grossman PPF Interactive
Explore how allocating time among health production, sickness, and home-good production creates a backward-bending frontier. Move along the frontier, examine key points, connect preferences to choices, check your understanding, and see how education or medical efficiency shifts the entire curve.
The labor–leisure trade-off and time constraint in the Grossman model
Launch: Open Labor–Leisure Interactive
Explore how Ed divides healthy time between work and leisure. The interactive lesson develops the time constraint, introduces preferences and indifference curves, identifies the best choice, and shows how additional healthy time changes the feasible set and equilibrium.
Marginal efficiency of investment in health and the Grossman model
Launch: Open Health Investment Interactive
Find the optimal health stock by comparing the marginal efficiency of health investment with its user cost. Then explore the Grossman model's predictions for how age, wages, and education affect health, and check your understanding with guided questions.
The marginal benefit, marginal cost, and optimal amount of insurance coverage
Launch: Open Insurance Demand Interactive
Find the optimal amount of insurance by comparing the marginal benefit and marginal cost of additional coverage. Then explore how the chosen coverage responds to changes in the premium, expected loss, and wealth, and check your understanding with guided questions.
Diminishing marginal utility, expected utility, and willingness to pay for coverage
Launch: Open Risk Aversion Interactive
Explore why diminishing marginal utility makes a risk-averse person prefer certain wealth to a gamble with the same expected value. Compare expected value and expected utility, identify an actuarially fair premium, and determine the most someone would pay for full insurance.
Asymmetric information, market unraveling, and adverse selection
Launch: Open Lemons Principle Interactive
Explore Akerlof's lemons principle by tracing how asymmetric information can unravel the used-car market. Then apply the same logic to adverse selection in health insurance and check your understanding with guided questions.