Question

An economic theory claims that a rise in gasoline prices will cause gasoline purchases to fall, Ceteris paribus. The phrase "Ceteris paribus" means that:

• A. other relevant factors like consumer incomes must be held constant.
• B. the gasoline prices must first be adjusted for inflation.
• C. the theory is widely accepted but cannot be accurately tested.
• D. consumers' need for gasoline remains the same regardless of the price.

Answer 1

The correct option is A

other relevant factors like consumer incomes must be held constant.

The phrase "Ceteris paribus" means other relevant factors like consumer incomes must be held constant.