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ECON 2006 Chapter 02

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224 A simplified representation that is used to study a real situation is called:  a production possibility frontier.  an assumption.  a trade-off. 225 The models that economists co... nstruct:  usually make simplifying assumptions.  often rely on physical constructs, such as those used by architects.  rarely use mathematical equations or graphs.  attempt to replicate the real world. Incorrect 226 When building a model, economists:  simplify reality in order to highlight what really matters.  attempt to duplicate reality in all of its complexity.  ignore the facts and instead try to determine what the facts should be. Incorrect  are careful to avoid the scientific method. 227 The models used in economics:  are usually limited to variables that are directly related.  are essentially not reliable because they are not testable in the real world.  are of necessity unrealistic and not related to the real world. Incorrect  emphasize basic relationships by abstracting from complexities in the everyday world. 228 Economic models are:  created and used to duplicate reality.  useless if they are simple. [Show More]

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