One Reason Why Economists Often Use Models in Their Analysis

question 243

Multiple Choice

One reason why economists often use models in their analysis is that

• A) a model helps us to understand, explain, and predict economic phenomena in the real world.
• B) a model accurately pictures every detail of the real world economy.
• C) a model relates to individual thought processes rather than behavior.
• D) it is relatively easy to perfectly specify a model.

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Definitions:

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in similar circumstances, leading to harm or damage.

Damages

Compensation claimed by a person who has suffered loss or harm due to the wrongful act of another.

Dry-Cleaning Chemicals

These are the chemicals used in the process of dry cleaning, which is a method of cleaning clothes and textiles using a solvent other than water.

Nominal Damages

A symbolic small amount of money awarded in court to recognize that a legal wrong has occurred, without the plaintiff having suffered significant loss.