Potential Pitfalls When Using Scientific Thinking
What will be an ideal response?
1. the "ceteris paribus" assumption
2. confusing correlation with causation
3. the fallacy of composition
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In a small country, using prices of 2012, GDP in 2012 was $100 and GDP in 2013 was $110. Using prices of 2013, GDP in 2012 was $200 and GDP in 2013 was $210
The country's BEA will calculate ________ percent as the growth in real GDP between those years. A) 7.5 B) 15 C) 10 D) 5 E) None of the above answers is correct.
In the specific factors model, the effects of trade on welfare overall are ________ and for fixed factors used to produce the imported good they are ________
A) positive; negative B) positive; positive C) negative; positive D) ambiguous; positive E) positive; ambiguous
The information content of a product can never be separated from the physical aspect of the product
Indicate whether the statement is true or false
The Taxpayer Relief Act of 1997 created the Hope Higher Education Scholarship program, which provides a maximum of $1,500 in tax credits for the first two years of college for families with adjusted gross incomes of less than $100,000 . Which factor(s) of production will change as a result of this program? Explain how this program is expected to affect the U.S. production possibilities curve