--%>
Assignment Help - homework help

Explain and give an illustration

Explain and give an illustration of (a) the fallacy of composition; and (b) the “after this, therefore because of this” fallacy.  Why are cause-and-effect relationships difficult to isolate in the social sciences?

E

Expert

Verified

(a) The fallacy of composition is the mistake of believing that something true for an individual part is necessarily true for the whole.  Example:  A single auto producer can increase its profits by lowering its price and taking business away from its competitors.  But matched price cuts by all auto manufacturers will not necessarily yield higher industry profits.

(b) The “after this, therefore because of this” fallacy is incorrectly reasoning that when one event precedes another, the first even necessarily caused the second.  Example:  Interest rates rise, followed by an increase in the rate of inflation, leading to the erroneous conclusion that the rise in interest rates caused the inflation.  Actually higher interest rates slow inflation.

Cause-and-effect relationships are difficult to isolate because “other things” are continually changing.

   Related Questions in Business Economics

  • Q : Illustrate the advantage and

    Illustrate the advantage and disadvantage of Corporations?

    		•
  • Q : Explain about the arbitrage except

    Not like speculation, there arbitrage is: (w) an activity which is generally more lucrative when conditions are favorable. (x) a profitable and relatively riskless activity. (y) the process of representing a domestic company within fo

    		•
  • Q : Illustrate the term Positive and

    Illustrate the term Positive and Normative Economics?

    		•
  • Q : Consumer and producer surplus in the

    In perfectly competitive market, the market demand and market supply curves are provided by Qd = 1000 −10Pd and Qd = 30Ps. Assume that the government gives a subsidy of $20 per unit to each and every seller in the mark

    		•
  • Q : Mixed Economy Define the term Mixed

    Define the term Mixed Economy and also state their advantages and disadvantages?

    		•
  • Q : Higher opportunity costs of attendance

    Economics professors would attribute students’ higher rates of attendance on days while examinations are administered to the: (w) intensified needs to learn valuable material. (x) higher opportunity costs of missing set relative to other schedul

    		•
  • Q : How can we calculate Price earnings

    How can we calculate Price earnings ratio?

    		•
  • Q : Describe unexpected deflation Describe

    Describe unexpected deflation?

    		•
  • Q : Determine equilibrium prices market

    The new supply and demand curves within University City were S0 and D0, before the county commission imposed a $3 per six-pack excise tax upon beer. The new equilibrium quantities of six-packs sold per month and equilibrium prices, respectively,

    		•
  • Q : Historical process by Adam Smith of

    Writings on the historical process by Adam Smith of economic development do not comprise heavy reliance upon: (1) the development of property rights. (2) self interest. (3) divisions of labor in production processes. (4) innovations d

    		•