Scarlett developed an economic model to describe the behavior of consumers according to the good price,and their income and tastes.All else equal,her model predicts that an increase in the price of the good may increase or decrease the number of units purchased.What can be said about Scarlett's model?
A) The model's prediction is ambiguous.
B) The model's prediction is not ambiguous.
C) The model has no assumptions.
D) B and C

Question

Quizplus · Accepted Answer

Scarlett's model predicts that an increase in the price of a good may increase or decrease the number of units purchased, which is an ambiguous prediction. This means that the model does not provide a clear and definite outcome, leaving room for different possible scenarios to occur. However, Scarlett's model does have assumptions, such as the influence of consumer income and tastes on their purchasing behavior. Therefore, options C and D are incorrect.

Scarlett Developed an Economic Model to Describe the Behavior of Consumers