An economic model is purposeful simplification of reality, whose function includes:
A. Understanding the full complexity of the real world
B. Predicting the behavior of each and every individual or organization
C. Analyzing the behavior of a typical or average consumer or firm
D. Forecasting economic random events with a high level of accuracy

An economic model is a theoretical representation of economic activities through use of variables and the defined logical and quantitative relationships that exist between them. The aim of economic model is to simplify economic processes in a way that can be easily understood.

Examples of economic model is the classical theory and production possibility frontier.

It is used to analyse economic activities that result from consumer behaviour.

BenitoMarin BenitoMarin · Answer 2 · 2020-03-09T18:05:03+01:00

Answer:

The correct answer is letter "C": Analyzing the behavior of a typical or average consumer or firm.

Explanation:

Economic models aim to represent real-world phenomena into simplified ideas that will allow individuals to understand why those events happen, predict them, and mitigate their impact when they are problematic. Those phenomena refer to events individuals, organizations, societies or countries perform. In most cases, those ideas end up becoming theories that could be supported by mathematical calculations.