Which of the following best illustrates the fallacy of composition?
a. If the price of a product rises, the quantity supplied will decline
b. The average wage rate tends to increase at approximately the same rate as inflation; hence, wage increases must cause inflation.
c. Resources are scarce; therefore, there is no such thing as a free lunch.
d. If I talk loudly at a party, I have a better chance of being heard by my listeners. If everyone at the party talks loudly, everyone can be heard more clearly.
d
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Why would acquiring 20,000 acres of land in Florida to build an amusement park be more difficult than acquiring 20,000 acres of land in Florida to grow oranges?
What will be an ideal response?
Use the following two statements in answering this question: I. For all Giffen goods the substitution effect is larger than the income effect. II. For all inferior goods the substitution effect is larger than the income effect
A) I and II are true. B) I is true, and II is false. C) I is false, and II is true. D) I and II are false.
If the demand for oranges falls, as a result, it is highly likely that the demand for:
A. orange juice will fall. B. orange grove workers will fall. C. apples will increase. D. apple orchard workers will decrease.
A regressive tax is one where the taxpayer's percent of income paid in taxes will ____ as incomes increase. An example is the ____
a. decrease; sales taxes on food b. decrease; state corporate income taxes c. increase; property taxes on residential real estate d. increase; federal household income taxes