Which of the following best illustrates the fallacy of composition?
a. If Jamal had more money, he could afford to buy more goods.
b. If Aisha stood up at a basketball game, she could get a better view of the game; if everyone stood up at a basketball game, everyone could have a better view of the game.
c. If the price of bread rose, consumers would buy less; if consumers bought less bread, the price of bread would rise.
d. High housing prices cause people to buy less housing, but an increase in income might cause them to buy more housing.
B
You might also like to view...
As practiced by book publishers, versioning involves first selling the hardcover edition of a book and then switching to a paperback edition to sell additional copies. As such, this is an application of second-degree price discrimination
Indicate whether the statement is true or false
What is the most efficient way a company can grow top-line profitably?
a. Acquire new customers b. Retain and increase sales to existing customers c. Create new products d. Assess whether the economy is actually growing e. All of the above
If Abigail can produce 4 portable power banks or 3 smartphones in a day, while Jacob can produce 1 portable power bank or 2 smart phones, then it is correct to state that
A) Abigail has a comparative advantage in producing smartphones. B) Abigail has an absolute advantage in producing portable power banks but not smartphones. C) Jacob has a comparative advantage in smartphones. D) Jacob has an absolute advantage in smartphones.
A firm earns a profit if
A. price equals marginal cost. B. total revenue exceeds the total cost of production. C. price is less than the total cost of production. D. total revenue equals total fixed costs.