Question

Economic models do not reflect the full complexity of reality and instead are based on____

a. Trade-offs
b. Purposeful simplifications.
c. Value judgments
d. The fallacy of composition.

Answer 1

Economic models are based on purposeful simplifications, allowing economists to focus on specific factors and relationships that are most important. These models are not intended to reflect the full complexity of reality, but they can be useful in analyzing and solving real-world economic problems.

Step-by-step explanation:

The economic models are based on purposeful simplifications. These models are not intended to reflect the full complexity of reality, but rather to provide a simplified representation of economic behavior and decision-making. By simplifying reality, economists are able to focus on specific factors and relationships that are deemed most important for understanding economic phenomena. This allows for the development of theories and predictions that can be useful in analyzing and solving real-world economic problems.