The importance of the ceteris paribus assumption is that it:
A)allows one to separate normative economic issues from positive economic ones.
B)allows one to generalize from the whole to the individual.
C)allows one to analyze the relationship between two variables apart from the influence of other variables.
D)allows one to hold all variables constant so the economy can be carefully observed in a suspended state.

Question

The importance of the ceteris paribus assumption is that it:
A)​allows one to separate normative economic issues from positive economic ones.
B)​allows one to generalize from the whole to the individual.
C)​allows one to analyze the relationship between two variables apart from the influence of other variables.
D)​allows one to hold all variables constant so the economy can be carefully observed in a suspended state.

Quizplus · Accepted Answer

The ceteris paribus assumption allows economists to isolate two variables and analyze their relationship independent of the influence of other variables. This is important for building economic models and making causal inferences. It is not related to normative economics, generalization, or suspending the economy.

The Importance of the Ceteris Paribus Assumption Is That It