"To be useful, a model must be completely realistic." Evaluate
What will be an ideal response?
This statement is incorrect. To be useful, a model must capture key real-world elements but cannot account for every detail of the real world. The model should capture the essential relationships that enable us to analyze the problem with which we are concerned. A model is useful so long as it sheds light on the central forces at work.
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A manufacturer of grenade launchers estimates that the probability of a fatal accident caused by the design of its product is 1/80,000 and the value of a life lost is $2 million
The manufacturer can change the design to eliminate that chance for $20 per grenade launcher and is prepared to incorporate all cost-justified precautions. Will the manufacturer change the design? What would the benevolent social planner think about the manufacturer's decision if the true value of a life is actually $1.5 million?
The leading producer of manufactured goods in 1900 was
a. the United States. b. Germany. c. England. d. Canada.