A Computer-Aided Exercise for Checking Novices' Understanding of Market Equilibrium Changes

Abstract

The difficulties of teaching introductory principles of comparative statics equilibrium analysis are well known, and failures to grasp their essentials often leave beginning students with a weak foundation for studies of other topics in economics. In this article, I describe a computer-aided supplement to the introductory microeconomics course that enhances students' understanding with simulation-based tools for reviewing what they have learned from lectures and conventional textbooks about comparing market equilibria. The heart of the method is an exercise that asks students to predict the consequences of supply and demand shifts by constructing statements of the form "If X increases (or decreases), then Y increases (or decreases)" where the X and Y variables are chosen from a menu including variables such as income, population, demand, supply, equilibrium price, equilibrium quantity, and so forth. The if-then statements are an alternative to the usual textbook way of describing equilibrium market changes, forcing students to translate what they have learned into a somewhat different format from the more traditional approaches. Although most students find the translations difficult, they typically show a dogged persistence in getting them right and, in the process, learn from their mistakes. The computer-based aids are essential to the way in which students have been doing the exercise in my classes-as an integral part of instructional software that I have been developing known as the Smithtown Collection. The collection derives from a laboratory prototype developed by cognitive psychologists (Shute, Glaser, and Raghavan 1989; Shute and Glaser 1990a, 1990b) who were interested in comparing computer-based learning in economics with other disciplines.' The exercise, adapted from the prototype, owes much to what psychologists have learned from studies of skill development, especially the importance of repetitive practice. Smithtown and my adaptations of it for classroom use have been described elsewhere (Katz and Ochs 1993; Katz 1992; Raghavan and Katz 1989), so I shall outline only those features that are directly relevant to understanding