Economic models are presented Through graphs and / or mathematical equations With graphs only With mathematical equations only With neither graphs nor mathematical equations With sophisticated physical structures that contains all economic variables

Answered: Economic models are presented…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

Economic models are presented

		Through graphs and / or mathematical equations
		With graphs only
		With mathematical equations only
		With neither graphs nor mathematical equations
		With sophisticated physical structures that contains all economic variables

Expert Solution

Step 1

Economic models are used to make predictions about the economic behavior. It gives the analyst a better understanding of the economic situation and problems related to it. There are two classes of economic models, theoretical and empirical. Theoretical models aim to derive implications about an economic behavior assuming that agents will maximize their objectives subject to constraints. Empirical models take into consideration the implications of the theoretical models and convert them to numerical results.