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Students treat a literal economics exam question as if it were an economics exam question. I'm not sure how you can be surprised by this even if you put some vague language at the start that you hoped meant "don't treat this as an economics exam question" but is easy to misinterpret

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Do you mean to say that you expect students to have such strong priors about what exam questions must be that they cannot be expected to answer a specifically worded question, much less correctly apply the proper model to the situation described in the question as opposed to picking a model at random?

It would seem by your post that I could write an exam comprising roughly of "Please answer 5 economics exam questions, on the topics of taxation, supply and demand for peanuts, elasticity of lawnmowers, and two other topics you wish, with at least one paragraph of response, and preferably a graph." and I should expect to get roughly the same answers from various students. After all, they have such strong priors about what an economics exam question should be and how it should be answered.

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