The fallacy of composition is the erroneous view that:
A)an increase in the supply of money will cause a general increase in the level of prices.
B)a small change in an economic variable will have an unrecognizable but significant effect on the economy.
C)when two events are associated, the one observed first must have caused the second.
D)if something is true for an individual, then it must also be true for a group.

Question

The fallacy of composition is the erroneous view that:
A)​an increase in the supply of money will cause a general increase in the level of prices.
B)​a small change in an economic variable will have an unrecognizable but significant effect on the economy.
C)​when two events are associated, the one observed first must have caused the second.
D)​if something is true for an individual, then it must also be true for a group.

Quizplus · Accepted Answer

The fallacy of composition occurs when someone assumes that what is true for an individual is true for the group as a whole. This is incorrect because what is true for an individual may not be true for the group. For example, one person standing up at a concert may have a better view, but if everyone stands up, no one will have a better view and the overall experience will be worse.

The Fallacy of Composition Is the Erroneous View That