The Fallacy of Composition Is the Incorrect View That

question 221

Multiple Choice

The fallacy of composition is the incorrect view that

• A) decisions are always made at the margin.
• B) incentives matter only to those who behave selfishly.
• C) if something is true for an individual, then it must also be true for the group.
• D) the value of a good can be objectively measured by its cost of production.

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Definitions:

Measure Of Variability

A statistical indicator of how widely values in a data set vary around the mean or median.

Range

The difference between the highest and the lowest values in a data set.

Frequency Distribution

A tabular summary of data showing the number (frequency) of observations in each of several nonoverlapping categories or classes.

Interstate Highway

A network of controlled-access highways that form part of the National Highway System in the United States, designed for high-speed vehicular traffic.