The prevalence of Alzheimer's dementia is very high among residents living in nursing homes. A student concludes that it is likely that living in a nursing home causes Alzheimer's dementia. What is the flaw in the student's reasoning?
A) The student has failed to take into account other causes of Alzheimer's disease.
B) The student is drawing a false conclusion; he is confusing cause and effect.
C) The student is using an inadequate sample size.
D) The student is drawing a false conclusion by making the mistake of omitting critical variables such as the age and gender of the residents.
Answer: B
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The above figure shows the Lorenz curves for four different countries. Which of the following statements CANNOT be made on the basis of the graph?
A) Incomes are distributed unequally in all four countries. B) Income distribution in country D is the most unequal among the four countries. C) Incomes are higher in country A than in country B. D) Income distribution is more equal in country B than in country D.
During the past 50 years, the production possibilities of the United States have expanded, increasing both short-run and long-run aggregate supply. Other things constant, this would lead to
a. an expansion in output and an increase in prices. b. an expansion in output and a decrease in prices. c. no change in either output or prices. d. no change in output and a decrease in prices.