Marshall Jevons

Suggested Questions for use with Marshall Jevons’s Murder at the Margin

1. Although Professor Spearman’s income had risen considerably since he first took his Ph. D., and he therefore could afford more vacations and leisurely pursuits, he indulged in less of such activities compared with the days when his income was lower. What doctrine of economics can explain this phenomenon? Had Spearman chosen more vacations or evenings spent enjoying his stamp collection, would he have been irrational?
2. Professor Spearman purchased a glass of iced tea on the boat trip across Pillsbury Sound. Had the iced tea not been accompanied by a wedge of lime, he would have rejected the purchase. What deceptively simple yet complex chain of reasoning led Spearman to make this decision?
3. Spearman said he planned to observe how the hotel’s pricing of cocktails affected the rate oat which people consumed them. What important principle (or law) of economics is he interested in observing at work? State this law and give another example from your own experience of its working. Have you ever observed an exception to this law?
4. What does the economist mean when reference is made to a person deriving “utility” from some activity?
5. Mrs. Felicia Doakes, the cookbook writer, believed that her last cookbook was sold at “a fair price.” Why was it not priced higher? Why was it not priced lower? What can one say, then, about the fair price Mrs. Doakes asserted she was charging and the profit-maximizing price Professor Spearman predicted that people in business would charge? Can you conclude that all profit-maximizing prices are “fair”?
6. What economic principles can explain how a person who dislikes dancing might still choose to dance? Do you believe that Spearman’s economic explanation of love in Chapter Eight is persuasive? Might it also be used to explain such phenomena as charity and philanthropy?
7. In Chapter Eight, two alternative explanations are offered for the importation of foreign labor into the Virgin Islands. One of these, the Marxian, is given by Professor Dyke; the other, a free market view, is offered by Spearman. Contrast these two views and defend one of them.
8. Is there any difference conceptually between a person desiring the highest price for something he or she is selling (such as Professor Dyke renting his house) and a person desiring to pay the lowest price for something he or she is buying (such as a business store owner purchasing the labor services of a sales clerk)?
9. What is meant by a “free port” (such as Charlotte Amalie in St. Thomas)? Define a tariff or import duty. What does Professor Spearman claim to be the effects upon price of tariffs and import duties? What experience, if any, have you had consistent or inconsistent with Spearman’s analysis?
10. Since prices of many products are lower in Charlotte Amalie than in Boston, why do profit-maximizing traders not buy the lower priced merchandise in St. Thomas and sell it at the higher prices on the mainland? If they did so, what would happen to prices in the two areas? What technical term is used to describe this process?
11. Professor Spearman offers an explanation for a seeming paradox: the world seems to be in danger of exhausting its supply of fish but not beef. How does the economics of “the common pool” resolve this paradox? Can you think of some examples of a “common pool” problem other than fish in the ocean?
12. When the pearly eyed thrasher pilfered scraps in the dining hall, Spearman explained its lack of caution in terms of risk preference. How might the psychology of thrashers vis-à-vis other birds be used to explain the distribution of income in the United States?
13. Select two suspects and explain what economic principle or line of economic reasoning Spearman used to eliminate them from consideration.
14. Spearman’s unraveling of the criminal activity at Cinnamon Bay ultimately rests on what fundamental principle or law of economics?

Major Economics Concepts Discussed in Murder at the Margin

Economic Concepts	Page References
Adam Smith’s Theory of Free Enterprise	88
Arbitrage	69-70
Capital, Theory of	115-116
Capitalism	92-93
Common Economics of	93
Demand, Law of	14, 79, 152, 164-66
Entrepreneurial Activity	86-87
Free Trade	68
Game Theory	138-139
Interdependent Utility Functions	54-55
Marginal Utility	11
Marxian Economics	59-60
Maximizing Utility	81
Minimax Strategy	138
Monopolistic Pricing	148
Opportunity Cost	8, 142, 167-168
Prisoner’s Dilemma	138-139
Private Property	93
Profit Maximization	31-32, 61, 92-93
Risk-Taking	150
Say’s Law	72
Supply & Demand	7, 72, 91
Trade-Offs	79
True Cost	79

Comments on teaching from Murder at the Margin will be received gratefully at:

Marshall Jevons
c/o Professor Kenneth G. Elzinga
PO Box 400182
Department of Economics
University of Virginia
Charlottesville, VA 22904-4182