Which of the following is an example of an application of the ceteris paribus assumption?
A)An analysis of how price changes affect how much of a good people will purchase when all other factors are held constant
B)An analysis of how people purchase more goods when prices decline and income increases
C)After reading an article on the dangers of high-fat diets, an individual buys less red meat when prices increase
D)An analysis of how worker productivity increases when a firm invests in new machines and training programs

Question

Quizplus · Accepted Answer

The ceteris paribus assumption means that all other factors are held constant except for the variable being studied. In this case, the analysis is solely focused on how the change in price affects the quantity demanded, while assuming that other factors such as income, tastes, and preferences remain constant.

Which of the Following Is an Example of an Application