Principles of Microeconomics / Unit 1 MIC 0009 short lesson, about 20 seconds
Theories, Models and Ceteris Paribus
Captions available
The idea
A theory simplifies how variables interact; a model puts a theory to work. Ceteris paribus means all other things unchanged, the assumption that isolates one effect.
In practice
A subway map omits every street and is more useful for it.
Where people slip
In the world everything changes at once, so the assumption is never literally met and every test must work around it.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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