"I do not have a pencil."

Translation: لَيْسَ عِنْدي قَلَم رَصاص.

[ConchiCastillo]

لَيْسَ عِنْدي قَلَم is curiously not accepted.

[TJ_Q8]

Typically, قلم is translated as "pen" only.
Pencil is قلم رصاص

[DavidAcost476578]

The word cheap appears as missing in the correct answer but is not in the phrase to be translated!

[TJ_Q8]

report it then - definitely (another) mistake is lurking there

[VictorBonn7]

The last word (right to left) in Arabic is "cheap" and not in the wrong "correct" answer given by Duolingo.

[TJ_Q8]

The last word is رصاص (lead).
Cheap is رخيص

Altogether, Pencil in Arabic is قلم رصاص (lead pen) - apparently at some point in history, pencils were made of lead.