Logging companies are always more profitable if they are able to harvest more (rather than less) lumber in a month. If you concluded from that fact that the logging industry is more profitable if all of the firms in the industry harvest more, then you would be
A. wrong because firms operate on jealousy.
B. wrong and have fallen victim to the fallacy of composition.
C. wrong because causation and correlation are not the same.
D. right.
Answer: B
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A country club charges a membership fee. Members pay competitive prices for the club's recreation and restaurant services. This situation is an example of
a. first-degree price discrimination. b. second-degree price discrimination. c. third-degree price discrimination. d. a two-part tariff.
Other things being equal, a fall in the price of orange juice will decrease the quantity supplied
a. True b. False Indicate whether the statement is true or false
Which of the following is an example of expansionary fiscal policy?
a. Increase taxes. b. Decrease government spending. c. Increase government spending. d. Increase taxes and decrease government spending equally.
For some products, purchases tend to decrease as the buyer's income increases. Such products are known as:
a. Normal goods b. Inferior goods c. Inverse goods d. Common goods