Using Documented Problem Solving in Economics

Initial Publication Date: September 27, 2010

The field of economics requires students to use critical thinking and problem solving skills, but unfortunately many students have not had the opportunity to develop such skills prior to entering the economics classroom. Thus, they find economics intimidating. This is unfortunate, but it makes a strong case for why documented problem solving is so well suited to economics courses. Documented problem solving provides students with a framework in which they can begin to explore their problem-solving strategies.

Documented problem solving has been used effectively in Principles of Economics courses at a large, public, research institution over the last few years. It's been used with the topics of production possibilities, supply and demand, price elasticity and consumer demand, market structures, the labor market, unemployment, fiscal and monetary policy, GDP per capita and economic growth, effective tax rates, international trade plus many more. Clearly, it can be applied to virtually any economics course. Students find the process challenging at first, but because the process itself is not graded, they soon relax and enjoy it as a tool that serves to enhance their learning process.

Documented Problem Solving Fosters Development of Critical Thinking and Problem-Solving Skills

Angelo & Cross (1993, p. 222) write "To become truly proficient problem solvers, students need to learn to do more than just get correct answers to textbook problems. At some point, they need to become aware of how they solved those problems and how they can adapt their problem-solving routines to deal with messy, real-world problems. . . Understanding and using effective problem-solving procedures is, after all, a critical component of mastery in most disciplines." Documented problem solving requires students to reflect on how they solve a problem and then write down the steps they use.

As students describe how they break an economic problem down into small, basic steps, they frequently write:

  • First, I reviewed the definition of...
  • I opened my notes to the section on...
  • The first thing my group thought about was...
  • I remembered the graph you drew and...
  • The directions say to find where the...
  • According to the equation...
  • I read the question and then I read it again...

Thus, documented problem solving provides a window through which the instructor can see students' thinking processes. It is rewarding for instructors to see students become more purposeful and deliberate in their approach to solving problems and to even develop problem-solving patterns that can be transferred to other areas in economics and other fields of study. Through the use of documented problem solving, students become more efficient learners; more expert-like in their thinking process.

Documented Problem Solving - Question Types

Documented problem solving works well with multiple choice, true/false and short answer questions. Questions from test banks will typically work and are readily available. Alternatively, faculty may choose to write their own questions. Questions do not need to be overly challenging in order to be suitable for documented problem solving, but they must require a multi-step thought process in order to arrive at the answer.

Economics questions that work well with this approach are those that:

  • Require students to follow a predictable path to arrive at the correct answer.
  • Involve calculations and require students to select the proper equation to use.
  • Include data and require students to interpret it.
  • Challenge students to think beyond what was delivered in the lecture or discussed in the text.
  • Require students to combine several independent concepts or ideas to achieve the correct answer.
  • Address topics that students typically struggle with.

A suitable economic question that students can write a documented problem solution for because it requires a multi-step process.

For product XYZ, the price elasticity of demand has an absolute value of 3. Ceteris paribus, this means that quantity demanded will increase by:

a) 1 percent for each 3 percent decrease in price. b) 1 unit for each $3 decrease in price.

c) 3 percent for each 1 percent decrease in price. d) 3 units for each $1 decrease in price.

Student's answer: First I opened my notes to read the definition for price elasticity of demand. Price elasticity measures the change in quantity demanded because of a change in price. The formula is (% change in quantity demanded) ÷ (% change in price). So for the answer to be 3, 3 goes on top (% change in quantity demanded) and 1 goes on bottom (% change in price). The real number is negative 3 because price and quantity demanded move in opposite directions. For this question, if price goes up by 1%, the quantity demanded goes down by 3%. Then I looked at the answer choices to see which one matched. If price goes down by 1%, then quantity demanded will go up by 3%, so c is the correct answer.

Economics questions that don't work well with this approach

Definition-type questions and questions that ask students to pick from a list are not good choices if they merely require students to recall memorized information. In such a case, there are no multiple steps for the student to describe. Remember, one of the primary reasons for using documented problem solving is to help students breakdown their solution process into individual steps which will ultimately assist them in developing analytical and critical thinking skills.

An unsuitable economic question that students cannot write a documented problem solution for because no problem-solving skills are required.

Which of the following countries produces the most output each year?

a) China b) United States c) Russia d) Mexico

Student's answer: The United States because that's what the table in the text says.

However, given that much of economics relies on analytical reasoning, it is easy to find plenty of questions that are appropriate.

Getting started with documented problem solving

The majority of the information that is needed to begin using documented problem solving is presented beginning with the Main page of this module.