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 causation and correlation are not the same.
B. right.
C. wrong because firms operate on jealousy.
D. wrong and have fallen victim to the fallacy of composition.
Answer: D
You might also like to view...
Efficiency wages paid to workers:
A) equal the lowest pay that workers would accept. B) are wages above the lowest pay that workers would accept. C) equal the marginal revenue product of the workers. D) are wages adjusted for changes in the price level.
According to international trade theory
A) trade is based on absolute advantage. B) comparative advantage is based on absolute advantage. C) every country has a comparative advantage in something. D) less developed countries cannot trade successfully with developed countries.
In oligopoly markets, firms have no perceptible influence on the market price
a. True b. False Indicate whether the statement is true or false
Which of the following is least likely to contribute to the volatility of investment spending?
a. Expectations about business conditions b. Changes in government spending c. Changes in tax laws d. Changes in capacity utilization e. Interest rate fluctuations