All economic models must involve simplifications because:
A) economists would be unable to command high salaries if their models were too simple.
B) human behavior is very erratic and unpredictable.
C) reality is too complex to understand in its entirety, so we must reduce the complexity to a level that we can understand.
D) economists try to cover all the possible variables.
E) we must ignore complexity.

Question

Quizplus · Accepted Answer

Economists recognize that reality is too complex to fully understand, so they use simplifications to make it more manageable to analyze and study. This does not mean that complexity is ignored or that economists try to cover all possible variables, but rather that simplification is necessary in order to gain insight into economic phenomena.

All Economic Models Must Involve Simplifications Because