13. An economic theory claims that a rise in gasoline prices will cause gasoline
ID: 1134460 • Letter: 1
Question
13. 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 dconsumers' need for gasoline remains the same regardless of the price. 14. An economic model is: a a plastic scaled version of the economy b a complete depiction of reality c. an abstraction from reality d applicable to consumer behavior but not to producer behavior e not an accepted tool of the economics profession. 15. The Latin expression Ceteris paribus means: a everything else being equal b. economic model c. economists are partly right. d. partial scarcity is certain. 16. Which of the following sayings best reflects the concept of opportunity cost? a. "You can't teach an old dog new tricks. b There is no such thing as a free lunch." C.I have a baker's dozen." d. "There's no business like show business."Explanation / Answer
13. The correct option is
The phrase ceteris paribus actually means every thing else being the same, and in this case, the factors whcih affects demand other than price, like income, taste, etc.
14. The correct option is
The model's basic definition is that it abstracts the concrete real phenomenon, so that the essential objects intended to be studied, are stripped out of their complexity.
15. The correct option is
16. The correct option is
This saying refers to the fact that one can not get something for nothing. To get something, some other thing must be sacrificed, which takes us to the concept of opportunity cost, which basically attempts to measures the opportunity cost and how it affects decisions.
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