The "other-things-constant" assumption:
A) allows an economist to make useful predictions.
B) is a prediction.
C) applies only to consumers' decisions and not to those of firms.
D) forces an economist to ignore reality, where things are constantly changing.
E) implies rational self-interest on the part of all economic actors.

Question

Quizplus · Accepted Answer

The "other-things-constant" assumption (also known as ceteris paribus) enables economists to isolate the effects of one variable on an economic outcome while holding all other factors constant. This assumption helps economists make useful predictions about how changes in one variable will affect others in a complex economic environment.

The "Other-Things-Constant" Assumption