The definition of an economic model.
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,
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.
Concept introduction:
Economic model: Economic models are the simplified versions of reality used to analyze real-world economic situation and issues.
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Chapter 2 Solutions
MindTap Economics, 1 term (6 months) Printed Access Card for Mankiw's Principles of Microeconomics, 8th (MindTap Course List)
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