Myanmar Matriculation Economics common mistakes
Myanmar Matriculation Economics · Understand the traps and how to avoid them.
When asked to find equilibrium price and quantity, students set quantity demanded equal to quantity supplied but then substitute the result back into only one equation and report the other variable from memory, or they add the two equations instead of equating them.
The algebra of simultaneous equations is drilled separately from economics, so students treat the two schedule equations as a pair to be 'solved' by any familiar operation. They also rush the back-substitution because they believe finding P is the whole answer.
What to do instead
Always write the condition Qd = Qs explicitly on its own line before substituting, then solve for P, then substitute P into the demand equation and separately into the supply equation to confirm both give the same Q. Practise five pairs of linear schedules until the two-step routine is automatic, and state the answer as a pair (P, Q).
Students describe opportunity cost as 'the money paid' or 'the price of the good', and when a production possibility curve is given they treat a movement along the curve as free rather than as a sacrifice of the other good.
Everyday usage equates cost with money, and students have not internalised that opportunity cost is the value of the next best alternative forgone, which exists even when no cash changes hands.
What to do instead
For every example, force yourself to name the forgone alternative in words: 'the cost of one more unit of X is the Y given up'. On a PPC, read the slope as the opportunity cost and practise calculating it as the change in Y divided by the change in X between two points.
When a price ceiling or price floor is introduced, students say the market 'clears at the new price' and report the equilibrium quantity instead of the quantity actually traded, and they fail to identify the resulting shortage or surplus.
Students memorise the definitions of ceiling and floor but never link them to the supply-and-demand diagram, so they do not see that a legal price prevents the market from reaching equilibrium.
What to do instead
Draw the diagram every time: mark the ceiling below equilibrium or the floor above it, read off Qd and Qs at the controlled price, then state the short side of the market as the quantity traded and compute the gap as shortage or surplus. Write one sentence on the non-price rationing that follows.
Students compute price elasticity of demand with the wrong denominator, dividing the change in quantity by the change in price, or they drop the negative sign and then mislabel the good as elastic when it is inelastic.
The formula is remembered as a vague 'change over change' without the base values, and percentage change is confused with absolute change. The negative sign convention is taught loosely.
What to do instead
Use the midpoint formula and write it in full: (ΔQ / average Q) ÷ (ΔP / average P). Compute each percentage change separately, note the absolute value, and then classify: greater than 1 elastic, less than 1 inelastic, equal to 1 unit elastic. Do a sanity check that a large responsiveness gives a large number.
In cost questions, students mix up fixed and variable costs when output is zero, reporting total cost as zero at zero output, or they confuse marginal cost with average cost.
Textbook tables are read row by row without the concept that fixed costs exist even when nothing is produced. Marginal and average are both 'per unit' ideas in students' minds.
What to do instead
Build the cost table yourself from a fixed-cost figure and a variable-cost column, and at Q = 0 write TC = FC explicitly. Define MC as the change in TC from one more unit and AC as TC divided by Q, then compute both for the same row and compare them, noting MC crosses AC at minimum AC.
For a profit-maximising firm, students equate price with marginal cost in every market structure, or they choose the output where average cost is lowest rather than where marginal revenue equals marginal cost.
Perfect competition is taught first and the P = MC rule is over-generalised. The word 'profit' is intuitively linked to low average cost rather than to the margin on the last unit.
What to do instead
State the rule as MR = MC for all firms, then note that under perfect competition P = MR so it becomes P = MC. Work one numerical example for a monopoly with a downward-sloping demand schedule, computing MR and MC in a table and showing that the AC-minimising output differs from the profit-maximising output.
When computing national income by the expenditure approach, students double-count intermediate goods, include transfer payments and second-hand sales, or forget that imports must be subtracted in an open economy.
The distinction between final and intermediate output, and between payments for currently produced output and transfers, is abstract, and students apply the addition mechanically to every figure in the question.
What to do instead
Before adding, classify each item in the list as final expenditure, intermediate, transfer, or import, and write the reason beside it. Then apply Y = C + I + G + (X − M). Practise with a mixed list of ten items where at least three must be excluded, and state the exclusion reason in your answer.
Students treat the money multiplier as 1 divided by the reserve ratio without checking whether the question gives the currency drain, and they confuse the central bank's policy rate with the commercial banks' lending rate.
Only the simple deposit multiplier is memorised, and the roles of central and commercial banks are blurred because both 'deal with money'.
What to do instead
Write the simple multiplier as 1/r and note the assumption that all loans are redeposited with no cash leakage. For policy questions, name the actor explicitly: the central bank sets the policy rate and reserve requirements, commercial banks set lending rates. Do one numerical example of deposit creation from an initial deposit and reserve ratio.
In fiscal policy questions, students call any tax increase 'contractionary' without distinguishing progressive, proportional and regressive structures, and they confuse a budget deficit with the national debt.
The words are learned as labels rather than as relationships, and 'deficit' and 'debt' sound interchangeable in everyday speech.
What to do instead
Define each term in one line before answering: progressive means the average rate rises with income, and a deficit is a single year's shortfall while debt is the accumulated stock. For each tax example, compute the average rate at two income levels to prove the classification rather than asserting it.
On balance of payments and exchange rate questions, students record the balance of trade as the whole current account, or they say a currency depreciation always improves the trade balance without mentioning the Marshall-Lerner condition or the J-curve.
The current account, trade balance and overall balance are nested concepts that are memorised as synonyms. Exchange rate effects are taught as one-directional, and the conditions attached to them are skipped.
What to do instead
Draw the balance of payments as a nested structure: trade balance inside the current account, current plus capital and financial accounts giving the overall balance. For depreciation, state the Marshall-Lerner condition explicitly and describe the J-curve timing effect. Answer in the form 'depreciation improves the trade balance only if ...'.