What types of assumptions economists make


Problem: Economists make three types of assumptions when developing models: Negligible assumptions (we assume things that do not impact the model do not matter}; domain assumptions (we assume something about the domain in which the model applies}; and heuristic assumptions {assumptions made that we know are unrealistic but allow us to build the model. Critically evaluate the assumptions of the Hecksher-Ohlin model. For each one, label it as a negligible, domain or heuristic assumption. What would it imply about the usability of the model if domain assumptions were violated? What would change about the model if we removed the heuristic assumptions?

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Microeconomics: What types of assumptions economists make
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