ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A simplified representation of a real situation that is used to better understand real-life situations.
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Illustrates trade-offs facing an economy that produces 2 goods. Shows max quantity of 1 good that can be produced for any given quantity produced of the other.
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Represents transactions in an economy by 2 kinds of flows around a circle:flows of physical things (goods or labor) in one direction and flows of money to pay for these physical things in the opposite direction.
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None of the above
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Detailed explanation-1: -A model is a simplified representation of reality that is used to better understand real-life situations … The importance of models is that they allow economists to focus on the effects of only one change at a time …
Detailed explanation-2: -A model can be defined as a simplified representation of some aspects of a real system.
Detailed explanation-3: -A model is a simplified representation of a system at some particular point in time or space intended to promote understanding of the real system. As an abstraction of a system, it offers insight about one or more of the system’s aspects, such as its function, structure, properties, performance, behavior, or cost.
Detailed explanation-4: -A simplified representation that is used to study a real situation is called:-a model.
Detailed explanation-5: -A theory is a simplified representation of how two or more variables interact with each other. The purpose of a theory is to take a complex, real-world issue and simplify it down to its essentials. If done well, this enables the analyst to understand the issue and any problems around it.