Why do economists use the ceteris paribus assumption?

Q: life example

A: Pareto-optimality belongs to welfare economics and implies social desirability; whereas…

Q: State whether true or false # Bread is always a consumer good

A: --> As the name suggests, consumer goods are the goods which are bought to use by the consumers.…

Q: Can someone else measure your utility why or why not?

A: The term "utility" is commonly used in the subject of economics. It can be used to calculate the…

Q: Which of the following is the best example of complementary goods?

A: We have to find complementary goods example.

Q: Critically discuss whether maximising behaviour or satisficing behaviour is the best way to explain…

A: Satisficing behavior refers to a type of behavior in which an individual prefers to consume goods…

Q: What is a major difference between adaptive and rationalexpectations? Give an example of each.

A: Meaning of Macroeconomics: The term macroeconomics refers to the situation of economic and…

Q: Which is not a key assumption to model consumer choice theory?" Seperability Transitivity…

A: There are three basic and fundamental assumptions of consumer theory.

Q: What is the difference between a positive and anormative statement? Give an example of each.

A: Economic policies are a combination of positive and normative statements. A normative statement…

Q: If a person has altruistic preferences, then we can say that she: Only cares about herself and not…

A: Altruism is described as doing anything at one's own expense for the good of others without…

Q: Explain the decision-making of economic agents (graphically and mathematically).

A: Economic agents are nothing but the players the impact and get impacted by the economic events .…

Q: Explain the cardinal and ordinal utility approach ?

A: Utility: Utility is the wants satisfying power of goods or services; in other words, utility is the…

Q: Economist Gerd Gigerenzer characterizes heuristics as “fast and frugal” ways of reaching decisions.…

A: Heuristics approach is a short cut of reaching to the decision that results in the decisions biases.…

Q: What is economics constants?

A: Constants remain same.They do not change.

Q: Good X If BC2 is the relevant budget constraint, then which of the following bundle(s) is(are)…

A: A budget constraint shows the amount of goods that consumer can purchase with given set of income

Q: All points on the utility possibilities frontier satisfy the Pareto condition.   TRUE OR FALSE

A: PPC is a graph that depicts the many combinations of two items that the economy can make. This graph…

Q: Based on the law of economics, is an invitation to go to the movies as a birthday gift, considered…

A: In economics, the second principle says "the economic cost of something is what you give up to get…

Q: Which of the following facts could not be explained by path-dependence? (choose one)    A) Sue lives…

A: Path dependence is when the decisions presented to people are dependent on previous decisions or…

Q: for most individuals? a. needs are less than their wants b. needs exceed their wants c. need…

A: Need is something that people must fulfill for there survival. For example: to satiate hunger, an…

Q: what are some keypoints about behavioral economics?

A: Behavioral economics is the study of psychology as it deals with the economic decision-making…

Q: Based on these data, describe the relevant relationship between the price of a hamburger and the…

A: Law of demand: It shows the inverse or negative relationship between quantity demanded and the…

Q: A central idea of economics is that by observing changes in ________, we can predict how choices…

A: According to the economists, the choices that individual makes are rational and by rational choices,…

Q: Define the consumer market and construct a simple model of consumer buyer behaviour?

A: The consumer market is a system where we can purchase products, goods and services which are being…

Q: What is the matching principle?

A: Matching principle is an accounting term which is used to state that each and every expense occurred…

Q: Indicate whether the statement is true or false, and justify your answer.Contrary to the predictions…

A: Even if there are circumstances where time consistent, rational people may place constraints on…

Q: Describe the two approaches of utility analysis !

A: Utility: Utility is simply the want satisfying power that a commodity possesses. In other words,…

Q: What are some key points about the utility-maximization model

A: Consume equilibrium is a state where consumer gets maximum satisfaction. Individuals and businesses…

Q: emperical evidence suggests that consumers tend to spend their current disposable income immediately

A: Disposable personal income is the income left with an individual after deducting all the taxes and…

Q: Pareto eliminated psychology from economics: a. by defining utility as ordinal, not cardinal utility…

A: Pareto is generally known as the main analyst of this switch (psychology to economics), and…

Q: Suppose Jane has $100$⁢100 and is going to have a birthday party. She wants to order pizza and…

A: An individual make purchase of different goods and services according to his income level and the…

Q: A discussion about psychological law of consumption

A: According to the psychological law of consumption "Increase in income increases consumption but not…

Q: He described economics as a science of material welfare

A: To find : Who describes economics as science of material welfare

Q: Give a real-life example (from your daily life) that illustrates total utility rising as marginal…

A: Total utility(TU) is the satisfaction or benefit derived from consuming a good. Marginal utility(MU)…

Q: Give examples of several real-world phenomena that can be explained by applying the theory of…

A: Consumer theory refers to the study where how consumers decide to spend their money according to…

Q: What is the example of the principles of Piety (Taqwa) in Islamic Economics that can relate with…

A: Islamic economics: It means Islamic commercial legal theory and also to an ideology of economics…

Q: Describe the procedure of considering economic decisions?

A: The following procedure should be kept in mind while taking economic decisions: Identify the…

Q: Individuals who buy second homes usually spend less for them than they do for their first homes. Why…

A: Law of diminishing marginal utility- As per this law as there is a rise in the consumption of…

Q: If “Law of Diminishing Marginal Utility” or I.C theory is nearer to reality?

A: The law of diminishing marginal utility states that the marginal utility of a any good or service…

Q: Discuss the distinction and similarities between partial and general equilibrium analysis.

A: Equilibrium is the situation where demand and supply which are two main important market forces that…

Q: Do the equations state that good A is a normal good? Yes or no. Defend your answer.

A: The demand for goods, and services comes from the buyers, or consumers. The markets tend to work…

Q: Explain why individuals make choices that are directly on the budget constraint, rather than inside…

A: Budget constraint refers to the line or the constraint which represents the combination of the…