Ceteris Paribus in Economic Analysis

Steps:

• Recall that "ceteris paribus" is a Latin phrase used in economics to isolate the effect of one variable.
• Translate it literally: "ceteris" means "other things," and "paribus" means "equal" or "unchanged."
• Apply to choices: Identify which option matches the idea of holding all other factors constant during analysis.
• Eliminate unrelated concepts like resource quality or price mechanisms.

Why B is correct:

• It directly matches the economic definition, where "ceteris paribus" assumes all other variables remain unchanged to study one factor's impact, as in supply-demand models.

Why the others are wrong:

• A: Refers to resource homogeneity, not a standard economic assumption.
• C: Describes market functioning, unrelated to the phrase's isolating purpose.
• D: Inverts the concept; the studied variable changes while others stay constant.

Final answer: B