a.
Yes, because gasoline is a luxury good and consumers are sensitive to changes in its price.
b.
Yes, because gas is a necessity that is in short supply. Consumers are always willing to buy more gasoline—even at higher prices.
c.
No, because there is too little information provided about inflation, consumer income and other variables to make an appropriate comparison.
d.
No, because prices cannot be compared this way over time.
ANSWER:
c
96. Which of the following would an economist most likely predict would happen if airfares to Asia were to increase?
a.
Airlines would make significantly more profits.
b.
Most people would not alter their travel and vacation plans.
c.
More individuals would choose to fly to Asia because now it is a more valuable experience.
d.
Many individuals would substitute toward other travel destinations.
ANSWER:
d
97. "When one basketball 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 does this statement illustrate?
a.
the fallacy of composition
b.
normative economics
c.
a positive correlation
d.
scarce resources
ANSWER:
a
98. Which statement best illustrates the fallacy of composition?
a.
If Sansa had more money, she would buy a new car; if she had a new car, she would have less money.
b.
If Olenna had more money, she could buy more goods; if Olenna’s family had more money, it could buy additional goods.
c.
If Rhaenyra had more money, she would buy her children more gifts; if her children had more gifts, they would be happier.
d.
If Emma had more money, she could buy more scarce goods; if the nation had more money, everyone could buy more scarce goods.
ANSWER:
d
99. What is the fallacy of composition?
a.
the idea that correlation does not imply causation
b.
the erroneous view that an economic activity can sometimes exceed the sum of its components
c.
the view that the aggregation of economic activity will necessarily lead to an outcome that differs from the outcome generated by each individual in the group
d.
the erroneous view that what is true for the individual will also be true for the group
ANSWER:
d
100. Which statement best illustrates the fallacy of composition?
a.
If the price of a Tesla increased, consumers would buy fewer of them; if consumers bought fewer Teslas, the price of a Tesla would rise.
b.
If Larys produces more, she can consume more; if Larys consumes more, she can produce more.
c.
If the price of a trip to Vancouver went down, more people could afford to go to Vancouver; if more people travelled to Vancouver, the price of the trip would increase.
d.
If Jaehaerys had more money, she would be wealthier; if a nation's money supply were larger, the people of the nation would be wealthier.
ANSWER:
d
101. Which statement best represents the erroneous view that is associated with the fallacy of composition?
a.
An increase in the supply of money will cause a general increase in the level of prices.
b.
When two events are correlated, the one observed first must have caused the second.
c.
If something is true for an individual, then it must also be true for a group.
d.
A small change in an economic variable will have an unrecognizable but significant effect on the economy.
ANSWER:
c
102. Which of the following best illustrates the fallacy of composition?
a.
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.
b.
Resources are scarce; therefore, there is no such thing as a free lunch.