Other things equal assumption helps isolate key economic
Explain the statement: “The other things equal assumption helps isolate key economic relationships.”?
Expert
Natural scientists such as chemists or physicists can much more easily control experiments and test with great precision an assumed relationship between two variables. Economists have a much more difficult time trying to isolate key economic relationships. Nonetheless, the “other things equal assumption” is extremely important. Economists must test their theories using real world data, generated by the actual operation of the economy. Under these conditions “other things” do change and despite sophisticated statistical techniques, controls are less than perfect. As a result economics principles are less precise than those of laboratory sciences.
Suppositions underpinning simple production possibilities frontier models don’t comprise a need that: (i) Net resources are fixed. (ii) All resources are efficiently employed. (iii) Technology is steady. (iv) Resource owners are paid according t
Question: Ambrose consumes two goods, peanuts (x1 ) and a composite good (x2). He has a utility functionU = 4 √x1 + x2. This means his MU1 = 2/ √x1 an
What are the merits of speciality in the use of human and material resources?
Describe briefly Low financial leverage, low operating leverage?
Describe unequal burdens of unemployment exist?
One early involvement of Adam Smith to the theory of gains by international trade, although later thoroughly revised and refined through David Ricardo, was the conception of: (1) mercantilism. (2) absolute advantage. (3) comparative a
Compare the costing and pricing process of heterodox pricing process to the procedures utilized in neoclassical microeconomics to set prices. In what ways are heterodox prices altered from neoclassical prices?
Define Dependent and independent variables?
Define Direct and inverse relationships?
What are the determinants of supply?
18,76,764
1934848 Asked
3,689
Active Tutors
1451294
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!