Economic models do not reflect the full complexity of reality and instead are based on:
A) trade-offs.
B) purposeful simplifications.
C) value judgments.
D) the fallacy of composition.

Question

Quizplus · Accepted Answer

Economic models are simplified versions of reality as it is impossible to represent the full complexity of real-life situations. These models are based on purposeful simplifications made by economists to capture the essential features of the economic system. This enables economists to create more manageable frameworks to analyze and explain economic phenomena.

Economic Models Do Not Reflect the Full Complexity of Reality