6.1.3 Ceteris Paribus Assumption

• What does the ceteris paribus assumption state when analyzing the relationship between two economic variables?

  All other factors are held constant
• The purpose of the ceteris paribus assumption is to isolate the effect of one economic variable
• The ceteris paribus assumption allows economists to draw clearer conclusions about economic relationships.


  True
• In a demand curve, what is held constant under the ceteris paribus assumption?

  Income, tastes, related prices
• The ceteris paribus assumption is crucial for testing economic theories and making accurate predictions.


  True
• The phrase "all other things being equal" is another way to describe the ceteris paribus assumption
• The ceteris paribus assumption is always realistic in real-world economies.

  False
• Assuming income stays constant when analyzing price changes is a realistic application of the ceteris paribus assumption.

  False
• The ceteris paribus assumption means "all other things being equal".


  True
• Why is the ceteris paribus assumption essential for establishing causality in economic relationships?

  It avoids interference from other factors
• The ceteris paribus assumption is widely used in economic models to isolate the effect of one variable
• The ceteris paribus assumption is used in economic models to isolate the effect of one variable
• The ceteris paribus assumption states that when analyzing the relationship between two economic variables, all other factors are held constant
• The purpose of the ceteris paribus assumption is to isolate the effect of one economic variable on another.


  True
• The ceteris paribus assumption helps economists simplify complex scenarios and establish direct relationships
• One limitation of the ceteris paribus assumption is that it can lead to inaccurate