All economic models must involve simplifications because
A)economists would be unable to command high salaries if their models were so simple that anyone could understand them
B)human behavior is very erratic and unpredictable
C)reality is too complex to understand in its entirety, so we must reduce it to a level that we can understand
D)they always try to duplicate all possible information and cover all possible variables that might influence decision making
E)we must rely on value judgments and ignore reality

Question

Quizplus · Accepted Answer

Reality is too complex to fully understand, so economists must simplify it to a level they can understand and analyze. This allows them to develop models that provide useful insights into economic behavior and decision-making. A, B, D, and E are incorrect because they don't accurately reflect why economists use simplifications in their models.

All Economic Models Must Involve Simplifications Because