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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Ethan washes and irons his own shirts. Sophia, his boss, sends her clothes to a laundry. Which is the most plausible economic explanation for this difference?
a. Ethan must enjoy ironing more than Sophia does. b. Ethan must be better at ironing than Sophia is. c. The opportunity cost of ironing is greater for Ethan. d. Sophia has a higher opportunity cost of laundering her clothes than Ethan does.
Which of the following has resulted from the rise in the participation of women in the labor force?
a. More men lost jobs in the long run b. Youth crime increased significantly c. Households produced less for themselves and demanded more from the market d. More families moved to rural areas