Someone Who Commits the Fallacy of Composition Is Likely to Assume

question 104

Multiple Choice

Someone who commits the fallacy of composition is likely to assume that:

• A)the simplest model is the best predictor.
• B)event B,which followed event A,was caused by event A.
• C)event B,which followed event A,was not necessarily caused by event A.
• D)what is true for the individual is also true for the group.
• E)what is true for the individual is not necessarily true for the group.

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Definitions:

Net Realizable Value

Net Realizable Value is the estimated selling price of goods, minus the estimated costs of completion and necessary selling costs, used for inventory valuation and accounts receivable.

Inventory

The merchandise and supplies a company maintains with the end purpose of selling or manufacturing.

Periodic Inventory System

A method of inventory management where inventory levels and cost of goods sold are updated in the accounting records on a periodic basis, such as monthly or annually.

FIFO Cost Method

An inventory valuation method that assumes goods are sold in the order they were acquired, using the costs of the earliest items first.