"As Soon as a Mayor Announced His/her 'Get Tough on Crime

question 61

Multiple Choice

"As soon as a mayor announced his/her 'get tough on crime' policy on New Year's day, criminals got scared and the crime rate went down." Suppose that the lower crime rate was actually caused by freezing cold temperatures in January ⎯ it was just too cold for anybody to be out robbing other people. Which fundamental hazard of the economic way of thinking did the mayor make?

• A) believing that what's good for one person is good for the whole group (the fallacy of composition)
• B) failing to take into account the benefits of crime (the payoff fallacy)
• C) believing that association is the same as causation
• D) failing to understand the difference between positive and normative economics.

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Definitions:

Succession Planning

A strategic process of identifying and preparing suitable employees to replace key roles within an organization in the future.

General Partnerships

A business partnership in which all partners share unlimited personal liability for the debts and obligations of the business and share in the profits and losses according to their agreement.

Real Estate

Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water.

Finance

The management of large amounts of money, especially by governments or large companies, including activities such as investing, borrowing, lending, budgeting, and saving.