Chapter 1, Problem 19AA

To determine

To ascertain: The situation when an economist considers the usefulness of economic model.

Explanation of Solution

If an economic model helps in analyzing the workings of the real world, then it is considered useful. For instance, people study the model of law of demand only because it helps in understanding the relationship between price and demand as it is in real word.

Economics Concept Introduction

Introduction:

An economic model refers to the simplified form of reality that helps to observe and predict about economic variables.