The ceteris paribus assumption is important in economics because
A) all empirical data are equal.
B) it would be impossible to relate the changes in one variable to another variable without holding other 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.
Answer: B
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A community in a Southeastern state passed a beautification ordinance (law) prohibiting the placement of indoor furniture outside of homes (i.e., no couches on the porch). The law represents a conflict between ____ and ____
a. the rich; the poor b. third parties; market participants c. victims; criminals d. public goods; private goods e. residents; visitors
If a negative externality results from the production of chemicals, an external cost is imposed on parties not directly involved in the market for the chemicals
a. True b. False Indicate whether the statement is true or false
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