Asked by MATTANAPORN CHANTIYANON on May 05, 2024
Verified
All economic models must involve simplifications because:
A) economists would be unable to command high salaries if their models were so simple that anyone could understand them.
B) human behavior is very erratic and unpredictable.
C) reality is too complex to understand in its entirety,so we must reduce the complexity to a level that we can understand.
D) they always try to duplicate all possible information and cover all possible variables that might influence decision making.
E) we must rely on value judgments and ignore reality.
Economic Models
Simplified representations of reality used to analyze and predict economic phenomena.
High Salaries
Compensation levels significantly above the average for comparable positions, typically reflecting high skill levels, experience, or demand.
Reality
The actual condition of affairs, in contrast to a theoretical or imaginary version of them.
- Comprehend that simplifications are necessary in economic models due to the intricate nature of real-world scenarios.
Verified Answer
DC
Darrion ChaversMay 09, 2024
Final Answer :
C
Explanation :
Economic models involve simplifications because reality is too complex to understand in its entirety, hence reducing the complexity to a level that can be understood.
Learning Objectives
- Comprehend that simplifications are necessary in economic models due to the intricate nature of real-world scenarios.