Question 1

What would an economist predict would happen if airfares to Europe were to increase?

Accepted Answer

If airfares to Europe were to increase, many individuals would substitute toward other travel destinations. This is because the higher price would make it less affordable for some people, so they would choose to go somewhere else instead. Additionally, some people may choose to take shorter or more local trips instead of flying to Europe. Overall, this substitution effect would result in fewer people traveling to Europe, but potentially more people traveling elsewhere.

Question 2

A student football team manager examined variables influencing the team's record and concluded that the best scores resulted when the "third-string" team played the most minutes.Therefore he recommended that the third-string team become the first team.Why is this conclusion probably erroneous?

Accepted Answer

The manager's conclusion is based on a correlation between the third-string team playing the most minutes and the team's best scores. However, correlation does not always imply causation. There may be other variables that contribute to the team's success that the manager did not consider, such as the skill level of the opposing teams or the performance of individual players. Therefore, simply making the third-string team the first team without considering these other factors may not lead to the same level of success.

Question 3

Which of the following statements describing correlation is the most accurate?

Accepted Answer

Correlation refers to a relationship between two variables, but it does not imply causation. While two sets of phenomena may be related, one does not necessarily cause the other. It is important to conduct further research to determine causation.

Question 4

Which of the following statements best illustrates the fallacy of composition?

Accepted Answer

The fallacy of composition is the error of generalizing from the individual to the whole. This means assuming that what holds true for one member of a group holds true for the entire group. For example, assuming that because one person in a group can see over a fence, everyone in the group can see over the fence. This is not always true and can lead to incorrect conclusions.

Question 5

If Canadian consumers bought more gasoline in 2007 (when prices averaged $1.30 per litre)than they did in 1980 (when prices averaged $0.40 per litre),does that mean that people buy more gasoline at higher prices?

Accepted Answer

The given information is not enough to make an appropriate comparison as there are other variables like inflation and consumer income that need to be taken into account while comparing prices of gasoline across different time periods. Therefore, it cannot be concluded that people buy more gasoline at higher prices based on this comparison alone.

Question 6

Ten-year-old Tommy observes that people who play hockey are larger than average and tells his mom that he's going to play hockey because it will make him big and strong.What is the problem with Tommy's logic?

Accepted Answer

Tommy is assuming that playing hockey causes people to be larger than average, but there may be other factors at play. It could be that people who are already larger and stronger are more likely to choose to play hockey. This is an example of mistaking correlation (hockey players tend to be larger and stronger) for causation (playing hockey causes people to be larger and stronger).

Question 7

A scientist is trying to test a theory about the relationship between people's consumption of alcohol and their longevity.Which of the following variables would the scientist NOT hold constant?

Accepted Answer

The scientist would not hold the amount of alcohol consumed constant because this is the variable being tested for its effect on longevity. Holding it constant would negate the purpose of the experiment.

Question 8

Many people have heard that the US stock market rises when a team from the National Football Conference (NFC)wins the Super Bowl,and falls when a team from the American Football Conference (AFC)is victorious.If you conclude that there is a causal relationship between the outcome of the Super Bowl and stock prices,you probably are making what mistake?

Accepted Answer

Correlation does not necessarily imply causation. Just because two things seem to be related does not mean that one caused the other. In this case, it is unlikely that the outcome of a football game directly affects the stock market. It is more likely that other factors, such as investor confidence or economic indicators, are driving changes in stock prices. Therefore, assuming a causal relationship based on correlation is a mistake.

Question 9

Which of the following best illustrates the fallacy of composition?

Accepted Answer

The fallacy of composition occurs when one assumes that what is true of a part must also be true of the whole. In option D, the statement assumes that if one person (Ms. Shiflet) has more money, it follows that if the entire nation had more money, everyone would be able to buy more scarce goods. However, there are limitations to the amount of scarce goods available, and increasing the amount of money in the entire nation would not necessarily result in more availability of these goods.

Question 10

Which of the following best illustrates the fallacy of composition?

Accepted Answer

The fallacy of composition occurs when a conclusion is drawn about the whole based on the characteristics of the parts. In this case, the assumption is that everyone talking loudly will lead to clearer communication, which may not be true.

Question 11

In a parliamentary debate about agricultural price supports,Members of Parliament and other experts made the following four statements.Which one of these is a normative statement?

Accepted Answer

Normative statements express a value judgement or an opinion, rather than a factual statement. Option B expresses an opinion that small family farms should be preserved, which is a normative statement. The other options are all positive statements, which describe a fact or predict an outcome without expressing an opinion or value judgement.

Question 12

Which of the following best illustrates the fallacy of composition?

Accepted Answer

The fallacy of composition is the error of assuming that what is true of a member of a group is true for the group as a whole. Choice D illustrates this fallacy by suggesting that if an individual having more money makes them wealthier, then a larger money supply for a nation would make its people wealthier, ignoring the potential for inflation and other macroeconomic factors that affect wealth at the national level.

Question 13

If rain dancing is correlated with rain,does that necessarily mean rain dancing causes rain?

Accepted Answer

Just because two variables are correlated, it does not necessarily mean that one causes the other. Correlation does not imply causation. Other variables, such as weather patterns, may be responsible for the rain.

Question 14

"When one hockey team spends a large sum of money acquiring better players,it is better off.If all teams do the same thing,all of them are better off." What is this statement an illustration of?

Accepted Answer

This statement is an illustration of the fallacy of composition, which assumes that what is true for the individual is true for the group as a whole. It is not necessarily true that all teams will be better off if they all spend large sums of money on better players, as it depends on factors such as team chemistry, coaching, and management.

Question 15

Which of the following best illustrates the fallacy of composition?

Accepted Answer

The fallacy of composition occurs when someone assumes that something that is true of a part must also be true of the whole. In this scenario, the individual assumes that leaving 30 minutes earlier will result in faster commute times for everyone, when in reality it could lead to more congestion and longer travel times overall.

Question 16

"To do well and be at the top 10 percent of the class,one should study more.If everyone studies more then they all can do well and finish at the top of the class." What is the problem with the logic in this statement?

Accepted Answer

The logic in this statement presents a fallacy of composition, assuming that if each individual student studies more, the whole class will automatically perform better. This overlooks the fact that there are limited spots available in the top 10 percent and would lead to a relative decline in performance.

Question 17

If individuals who sit in the back of the classroom receive lower grades on average than the rest of the class,does that mean that sitting in the back of a classroom causes one to perform poorly on exams?

Accepted Answer

The statement "the reoccurrence of a certain relationship between two variables does not necessarily imply causation" is a well-known principle in statistics and research. Just because there is a correlation between sitting in the back of the classroom and lower grades, it does not necessarily mean that sitting in the back of the classroom causes lower grades. There could be other factors at play that contribute to the lower grades. Therefore, it is important to be cautious when interpreting relationships between variables and not jump to conclusions about causation without further evidence.

Question 18

What is the fallacy of composition?

Accepted Answer

The fallacy of composition is the erroneous view that what is true for the individual will also be true for the group. It assumes that the characteristics or properties of the parts are the same as the whole, leading to incorrect conclusions. For example, just because an individual can stand up at a crowded concert to get a better view, it does not mean that everyone in the crowd can do so without causing chaos.

Question 19

Which of the following is the erroneous view that is associated with the fallacy of composition?

Accepted Answer

The fallacy of composition involves assuming that what is true of the parts is also true of the whole. Therefore, choice C, which states that something true for an individual must be true for a group, is an example of this fallacy. The other choices are not related to this fallacy.

Question 20

A theory asserts that consumers will purchase less of a good at higher prices than they will at lower prices.However,when the average price of cars increased throughout the 1990s,more cars were purchased.Which of the following explanations of the apparent conflict between theory and data is most accurate?

Accepted Answer

The theory that consumers will purchase less of a good at higher prices than at lower prices is based on ceteris paribus assumption, which means that all other factors remain constant. However, in the case of cars, there were likely other variables at play, such as changes in income levels or availability of credit, that caused an increase in demand despite higher prices. Therefore, the apparent conflict with the theory can be explained by these other factors.

Quiz 1: The Role and Method of Economics

What would an economist predict would happen if airfares to Europe were to increase?

A student football team manager examined variables influencing the team's record and concluded that the best scores resulted when the "third-string" team played the most minutes.Therefore he recommended that the third-string team become the first team.Why is this conclusion probably erroneous?

Which of the following statements describing correlation is the most accurate?

Which of the following statements best illustrates the fallacy of composition?

If Canadian consumers bought more gasoline in 2007 (when prices averaged $1.30 per litre) than they did in 1980 (when prices averaged $0.40 per litre) ,does that mean that people buy more gasoline at higher prices?

Ten-year-old Tommy observes that people who play hockey are larger than average and tells his mom that he's going to play hockey because it will make him big and strong.What is the problem with Tommy's logic?

A scientist is trying to test a theory about the relationship between people's consumption of alcohol and their longevity.Which of the following variables would the scientist NOT hold constant?

Which of the following best illustrates the fallacy of composition?

Which of the following best illustrates the fallacy of composition?

In a parliamentary debate about agricultural price supports,Members of Parliament and other experts made the following four statements.Which one of these is a normative statement?

Which of the following best illustrates the fallacy of composition?

If rain dancing is correlated with rain,does that necessarily mean rain dancing causes rain?

"When one hockey team spends a large sum of money acquiring better players,it is better off.If all teams do the same thing,all of them are better off." What is this statement an illustration of?

Which of the following best illustrates the fallacy of composition?

"To do well and be at the top 10 percent of the class,one should study more.If everyone studies more then they all can do well and finish at the top of the class." What is the problem with the logic in this statement?

If individuals who sit in the back of the classroom receive lower grades on average than the rest of the class,does that mean that sitting in the back of a classroom causes one to perform poorly on exams?

What is the fallacy of composition?

Which of the following is the erroneous view that is associated with the fallacy of composition?