John, a farmer, thinks he will make a profit next year if the weather stays the same, if the price of his crop doesn't change, and if the price of fertilizer and seed does not change. An economist would say that this farmer thinking he will make a profit the following year is an example of
A) laissez-faire.
B) ceteris paribus.
C) post hoc ergo propter hoc.
D) e pluribus unum.

Question

Quizplus · Accepted Answer

The economist would say that the farmer thinking he will make a profit next year if everything stays the same (weather, crop price, fertilizer & seed prices) is an example of ceteris paribus, which means "all other things being equal." This is a common assumption made in economic analysis and modeling, as it allows us to isolate and study the effects of specific variables on outcomes.

John, a Farmer, Thinks He Will Make a Profit Next