Bundle: Essentials Of Economics, Loose-leaf Version, 8th + Lms Integrated Mindtap Economics, 1 Term (6 Months) Printed Access Card
Question
Book Icon
Chapter 2, Problem 1CQQ
To determine

The definition of an economic model.

Expert Solution & Answer
Check Mark

Answer to Problem 1CQQ

Option “c” is correct.

Explanation of Solution

Option (c):

The economic model can be defined as the simplified representation of some aspects of an economy or a simplified framework of a real, complex world. The economist uses the models for the generation of different economic ideas, new concepts, formulation of new principles, solving the questions in the economy, forecasting demand patterns, and so forth. Sometimes, economists use an existing model to analyze a real world problem or issues, but in other cases, they have to develop new models. Thus, option “c” is correct.

Option (a):

An economic model is not a mechanical machine that replicates the functioning of the economy but is just model of a real situation of economy that is made by an economist. Thus, option “a” is incorrect.

Option (b):

An economic model is not a fully-detailed, realistic description of the economy, as it is a representation of a real, complex situation. But, it can’t describe the reality precisely. Thus, option “b” is incorrect.

Option (d):

A model is not a computer program for predicting the future of the economy. It is a small, simplified version of different economic aspects. Thus, option “d” is incorrect.

Economics Concept Introduction

Concept introduction:

Economic model: Economic models are the simplified versions of reality used to analyze real-world economic situation and issues.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
What are the 15 things/places/foods/culture or any strategies that could showcase the attractiveness of the Philippines to foreign investors? Use factual information in each strategies and discuss.
Two firms are competing in a Cournot duopoly. Both firms have the same constant marginal cost. The market demand is linear. Suppose the constant marginal cost of firm 2 is increasing. Which of the following statements are correct? [There may be more than one correct statement.]     The quantity of firm 1 and the quantity of firm 2 both go up.     The quantity of firm 1 goes up and the quantity of firm 2 goes down.     The market price goes down.     The market price goes up.     The quantity of firm 1 and the quantity of firm 2 go down.     The quantity of firm 1 goes down and the quantity of firm 2 goes up.     The market price stays the same.
evaluate the impact of government interventions, such as antitrust regulations, price controls, or subsidies, on various market structures. Select a specific industry and examine how these interventions have influenced competition, consumer welfare, and economic efficiency. Provide the pros and cons of government intervention.
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Text book image
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Brief Principles of Macroeconomics (MindTap Cours...
Economics
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Text book image
Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning