When economists use the term "ceteris paribus," they mean that:
a. the causal relationship between two economic variables cannot be determined.
b. the analysis is true for the individual but not for the economy as a whole
c. all other variables except the ones specified are assumed to be constant.
d. their conclusions are based on normative rather than positive economic analysis.
c
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Relative to a world in which some people are motivated by nonmaterial incentives, if all people were motivated solely by financial incentives, then:
A. both business transactions and personal interactions would be different. B. transactions in the business world would be the same, but personal interactions would not. C. there would be no commitment problems. D. economic efficiency would be achieved more often.
"A price floor that is less than the equilibrium price leads to a shortage of the good." Is this assertion true or false? Explain your answer
What will be an ideal response?
We expect a rise in transfer payments when
a. the needs of the poor receive more publicity b. taxes rise c. GDP rises and inflation soars d. the retirement age remains unchanged over time e. recessions occur
Which of the following decrease demand for any good or service?
A. Falling incomes and the product is a normal good. B. A decrease in the price of a substitute good. C. Consumer expectations that either prices or income will rise in the future. D. An increase in the number of buyers. E. An unfavorable change in consumer tastes.