The definition of a model is a: a. description of all variables ...

[tth]

The definition of a model is a:
 a. description of all variables affecting a situation.
  b. positive analysis of all variables affecting an event.
  c. simplified description of reality to understand and predict an economic event.
  d. data adjusted for rational action.

Question 2

An economic theory claims that a rise in gasoline prices will cause gasoline purchases to fall, Ceteris paribus. The phrase Ceteris paribus means that:
 a. other relevant factors like consumer incomes must be held constant.
  b. the gasoline prices must first be adjusted for inflation.
  c. the theory is widely accepted but cannot be accurately tested.
  d. consumers' need for gasoline remains the same regardless of the price.

[heinisk01]

Answer to Question 1

c

Answer to Question 2

a