A Student Football Team Manager Examined Variables Influencing the Team's

question 166

Multiple Choice

A student football team manager examined variables influencing the team's record and concluded that the best scores resulted when the "third-string" team played the most minutes. Therefore he recommended that the third-string team become the first team. Why is this conclusion probably erroneous?

• A) He failed to recognize that correlation is not causation.
• B) He did not review the entire game strategy carefully enough.
• C) He committed the fallacy of composition.
• D) He confused positive and normative analysis.

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Definitions:

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-run average total costs.

Constant Returns to Scale

A situation in which the proportionate increase in inputs leads to an equal proportionate increase in outputs, meaning costs and outputs scale equally as production expands.

Diseconomies of Scale

A situation where a business's cost per unit increases as it produces more items, due to inefficiencies that arise with scaling up production.

Plant Size

Refers to the physical capacity or output level of a manufacturing or production facility.