Teaching Economic Principles: Algebra, Graph or Both?

Abstract

We find that student performance on questions posed in the standard heterogeneous combination of algebraic direct demand and graphic inverse demand is significantly worse than their performance on questions posed in homogeneous combinations. Since this performance deficit persists with advanced students, it seems that economists’ canonical presentation of demand may hinder, rather than help, learning. We recommend that Principles students begin with the homogenous, direct combination of algebra and graph before turning to the standard direct-inverse combination. This modification would create benefits on the extensive margin — reducing attrition from confusion — and intensive margin — increasing comprehension for all students.

Keywords: teaching methodology, inverse demand, graphs, algebra

JEL Classification: A22, B1