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==Test-taking Techniques in Economics==

==Test-taking Techniques in Economics==

Good test-taking techniques are particularly important to doing well on an economics exam.  Simple questions are often intentionally disguised as something more complicated.  It is easy to become confused and misguided in analyzing economic issues.  99% of the public would say that we would be better off if Congress put a price ceiling or cap on gasoline at $1.50 a gallon.  It takes a bit more thought to realize that massive shortages would result, and we would all have to spend hours each week waiting in line for gasoline.  Some may not be able to obtain gas at all.

Good test-taking techniques are particularly important to doing well on an economics exam.  Simple questions are often intentionally disguised as something more complicated.  It is easy to become confused and misguided in analyzing economic issues.  99% of the public would say that we would be better off if Congress put a price ceiling or cap on gasoline at $1.50 a gallon.  It takes a bit more thought to realize that massive shortages would result, and we would all have to waste hours each week waiting in line for gasoline.  Some who really need gas in hurry, such as people trying to take someone to a hospital, may not be able to obtain gas in time.

The ability to eliminate wrong answers is very important on economics exams.  We have already seen questions on the mid-term exam that are best analyzed by eliminating two wrong answers, and then choosing the best answer among the remaining two.   

The ability to eliminate wrong answers is very important on economics exams.  We have already seen questions on the mid-term exam that are best analyzed by eliminating two wrong answers, and then choosing the best answer among the remaining two.   

Let’s try the elimination technique on a real CLEP question:

Let’s try the elimination technique using questions based CLEP questions:

   

   

Which of the following is true about the official measure of the poverty-level income for a family of four in the United States?

The poverty-level income for a family of four in America: which of the following can be said about how the government definition of this specific income level?

(A) It is used to determine eligibility for Social Security benefits.

(A) It is used to determine eligibility for Social Security benefits.

Virtually none of you would know the answer to this question at first glance.  The question is not really appropriate for a microeconomics exam, but CLEP asks it anyway.  Questions about poverty, gaps between the rich and poor, and government programs are always favorites among liberal educators.  You will see many more questions about these issues than about the invisible hand or the creation of wealth.

 

 

 

 

Virtually none of you would know the answer to this question at first glance.  The question is not really appropriate for a microeconomics exam, but CLEP asks it anyway.  Questions about poverty, gaps between the rich and poor, and government programs are always favorites among typical educators.  You will see many more questions about these issues than about the invisible hand or the creation of wealth.

So what do we do when faced with this question?  Simply give up?  Move to the next question and hope it is easier?  Blindly guess at an answer?  None of the above.   

So what do we do when faced with this question?  Simply give up?  Move to the next question and hope it is easier?  Blindly guess at an answer?  None of the above.   

We can narrow the choices, and thereby reduce our risk of error, by eliminating wrong answers.  Basic economic principles (or common sense) serve as our guide.

We can narrow the choices, and thereby reduce our risk of error, by eliminating wrong answers.  Basic economic principles (or common sense) serve as our guide.

Let’s start with choice (B): “It shows that roughly half of all Americans live in poverty.” Think about it: declaring half of the country to be “poor”?  Half of your friends in poverty?  Half of New Jersey in poverty? Imagine the political effect if that were really true. Who would pay to run government?  What would we call the most poor of the poor?  The percentage of half is far too high.  With common sense, we can eliminate this answer.

Let’s start with choice (B).  Think about it: is half of our nation living in poverty?  What would that mean for elections?  Who would pay to run government?  If we called half of us "poor", then what word would be use for the really poor?  Choice (B) can't be true.  Using common sense, we can eliminate this answer.

Let’s turn to choice (E): “It is not adjusted each year for changes in the cost of living.”  Why wouldn’t it be adjusted?  Poverty must be relative to the cost of living.  If the cost of living doubled, then the numbers in poverty would increase greatly.  But failure to adjust for the cost of living would miss that effect.  Again, common sense leads us to eliminate this answer.

<>Let’s turn to choice (E): “It is not adjusted each year for changes in the cost of living.”  Why wouldn’t it be adjusted?  Poverty must be relative to the cost of living.  If the cost of living doubled, then the numbers in poverty would increase greatly.  But failure to adjust for the cost of living would miss that effect.  Again, common sense leads us to eliminate this answer.

Next we can turn to choice (A): “It is used to determine eligibility for Social Security benefits.”  That cannot be true: virtually everyone must pay Social Security taxes, and then receive benefits when they become old.  All politicians, rich or poor, defend Social Security.  “Social security” is not “security only if you’re poor.”  We can eliminate this choice.

Next we can turn to choice (A): “It is used to determine eligibility for Social Security benefits.”  That cannot be true: virtually everyone must pay Social Security taxes, and then receive benefits when they become old.  All politicians, rich or poor, defend Social Security.  “Social security” is not “security only if you’re poor.”  We can eliminate this choice.