(Last Word) the Post Hoc Fallacy and the Correlation Problem

question 269

Multiple Choice

(Last Word) The post hoc fallacy and the correlation problem both relate to

• A)the calculation of marginal costs and marginal benefits of any economic activity.
• B)the issue of determining causation.
• C)the frequent inability of households and businesses to behave rationally.
• D)the trade-off problem associated with competing goals.

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Definitions:

Market Economy

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.

Scarce Resources

Natural or human resources that are limited in supply, compelling choices regarding their use.

Willing and Able

Describes individuals who are both inclined and have the capacity to work or engage in economic activity.

Short-Term Shortage

A temporary situation where the demand for a product or service exceeds its supply in the market.