How to Teach “Efficiency” to Middle/High School Students
It is rather difficult to teach such abstract concepts as "efficiency" and "optimality" to middle/high school students. The following is an idea of teaching these concepts relatively easily to students
1) Economics is a subject to "economize," that is to eliminate or minimize "waste" in our life as well as in our society.
2) Then, what is "waste"? There is some visible waste such as stockpiles of unsold goods and involuntary unemployment.
3) However, there is much more "invisible" than visible waste, such as mismatch between goods and taste and also between skills and jobs.
4) The economy is said to be "efficient," if there is no such waste in the economy. But how such an efficient economy can be realized?
5) Efficiency could be realized if there were the Almighty God who knows everything including people's taste and skills.
6) In reality, communist dictators tried to be the Almighty God, but they failed since they could not possibly know each and every individual's taste or skills. Then, is there any way the economy can achieve efficiency? The answer is "yes, there is a way."
7) That is through the free market system, in which individuals can buy goods and services in the free market, according to their taste, subject to their income, and earn income by supplying labor in the free market. The free market system can achieve efficiency as if individuals were led by the God's "invisible hand."
8) It is needless to say that in reality markets are not so free and, as a result, there is some waste existing in the economy. We should study under what conditions efficiency can be achieved or cannot be achieved, and how waste can be eliminated if it exists in the market economy.
This idea came out of the exchange of opinions in the "Open Discussion Room" (http://seadog.gifu.shotoku.ac.jp/econ-edu/gate/) on the homepage of the Network for Economic Education (http://www.econ-edu.net/).
For a Japanese version of this report, see the following: