What term describes the principle that all other things are being held equal in economics?

The principle that describes the situation where all other things are held equal is referred to as "ceteris paribus." This Latin phrase translates to "other things being equal," and it is a fundamental concept in economics that allows economists to isolate the effect of one variable in a model while assuming that other relevant factors remain unchanged. By using ceteris paribus, economists can simplify complex economic interactions and analysis, enabling them to focus on the relationship between two specific variables without the influence of external changes.

In contrast, scarcity refers to the limited nature of society's resources, which necessitates making choices and trade-offs. Opportunity cost is the value of the next best alternative that is forgone when a choice is made, highlighting the costs associated with decision-making. Positive economics deals with objective analysis and the description of economic phenomena, contrasting with normative economics, which involves judgments about what ought to be. Ceteris paribus serves as a critical assumption that underpins much of economic theory and analysis, making it essential for understanding causal relationships in economic models.