The ceteris paribus assumption is important in economics because
A) all empirical data are equal.
B) it would be impossible to relate the effects of changes in one variable on another without holding some variables constant.
C) economic data move very slowly over time and so they can always be considered constant.
D) models are always complex and require as many variables as possible.
B
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The indifference curves for perfect substitutes are straight lines
a. True b. False Indicate whether the statement is true or false
Refer to the given diagram. The marginal propensity to save is:
A. CD/EF.
B. CB/CF.
C. CB/AF.
D. EF/CB.
The median-voter theorem suggests that:
A. politicians maximize their votes by taking the policy position preferred by the median voter, under certain conditions. B. Politicians always receive more votes in general elections when they appeal to extremists in their party. C. the middle voter is generally influenced by the side they have more information on concerning an issue. D. voters tend to vote with a "mob-mentality," all voting the same.
Using money as a unit of account lowers information costs compared to barter exchanges
a. True b. False Indicate whether the statement is true or false