Economic models that make unrealistic assumptions may be useful in analyzing some economic problems.

Question

Quizplus · Accepted Answer

Economic models often simplify and make assumptions in order to make analysis and predictions easier. While these assumptions may not perfectly reflect reality, they can still be useful in understanding economic concepts and making decisions. However, it is important to also recognize the limitations of these models and not rely solely on them for decision making.

Economic Models That Make Unrealistic Assumptions May Be Useful in Analyzing