ECONOMICS
OPPORTUNITY COST
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An economic situation where no individual would be better off doing something different.
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Description of market / economy that takes all opportunities to make some people better off without making other people worse off.
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Fairness; everyone gets his / her fair share.
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All other relevant factors remain unchanged.
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Detailed explanation-1: -Ceteris paribus is a Latin phrase that generally means “all other things being equal.” In economics, it acts as a shorthand indication of the effect one economic variable has on another, provided all other variables remain the same.
Detailed explanation-2: -In economics, the assumption of ceteris paribus, a Latin phrase meaning “with other things the same” or “other things being equal or held constant, ” is important in determining causation. It helps isolate multiple independent variables affecting a dependent variable.
Detailed explanation-3: -What is Ceteris Paribus. Definition: This commonly-used phrase stands for ‘all other things being unchanged or constant’. It is used in economics to rule out the possibility of ‘other’ factors changing, i.e. the specific causal relation between two variables is focused.
Detailed explanation-4: -Ceteris paribus is a Latin phrase that means “all other things being equal.” Experts use it to explain the theory behind laws of economics and nature. It means that something will occur as a result of something else most of the time, if nothing else changes.
Detailed explanation-5: -Microeconomic theories are based on assumptions like “ceterius paribus", which means “other things being constant” because it deals with partial equilibrium analysis. Partial equilibrium analysis studies the effect of one variable upon the other without considering the effect of other factors.