When an economics students draws a supply and demand diagram to model an increase in the income, she is assuming this change happens

Question

Quizplus · Accepted Answer

The assumption of "ceteris paribus" or "all other things being equal" is essential in economics when drawing supply and demand diagrams. This assumption allows the model to isolate and focus on the specific change being analyzed, in this case, an increase in income. Without ceteris paribus, it would be difficult to determine the exact cause and effect relationship between the increase in income and the resulting changes in supply and demand. The other options are not applicable in this context.

When an Economics Students Draws a Supply and Demand Diagram