Question

Just like models constructed in other areas of science, economic models a. complicate reality. b. incorporate assumptions that contradict reality. c. avoid the use of diagrams and equations. d. incorporate all details of the real world.

Answer 1

Answer:

B. incorporate assumptions that contradict reality.

Explanation:

This contradiction can be found in all type of economic model. I will present you capitalism and communism as example.

- Capitalism

This economic model used the assumption that if the government let the market operate on their own, producers and consumers will come to their own terms and create a fair/mutually beneficial relationship.

This often contradict reality since many producers might use dangerous materials in their products and deceive the consumers. Government is needed for consumer's protection.

- Communism

This economic model used the assumption that if the government take control of all resources and divided equally to the people, the resources will be handled efficiently and people will be satisfied with the situation.

This contradict reality since it killed people's motivation to pursue career with a lot of time and investment . If Doctors and cashier are paid the same, no one will bother to learn 5-8 hours a day for 7 years while those who are trained for 25 minutes to operate a cashier machine are paid the same.