The Principle That Irrelevant Detail Should Not Be Included in a Model

question 51

Multiple Choice

The principle that irrelevant detail should not be included in a model is known as

• A) a fallacy.
• B) ceteris paribus.
• C) Ockham's razor.
• D) normative economics.

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Definitions:

Total Profit Maximization

The process of adjusting output and pricing to achieve the highest possible profit in a business operation.

MB = MC

The optimal condition in economics where the marginal benefit (MB) of an action is equal to its marginal cost (MC), leading to efficient allocation of resources.

MB < MC

A condition where the marginal benefit of producing an additional unit is less than the marginal cost of producing that unit.

Decision Maker

An individual or group responsible for making choices or judgments, particularly in a professional or organizational context.