Which Statement Best Illustrates the Fallacy of Composition

question 41

Multiple Choice

Which statement best illustrates the fallacy of composition?

• A) If the average price I pay for food rises,the purchasing power of my income has fallen.
• B) If I stand up,I will see better at a football game;therefore,if all the football spectators stand up,they will all see better.
• C) If I attend more classes,I will learn more.
• D) If I buy more gasoline each week,my gasoline consumption has increased;therefore,if all gasoline consumers buy more gasoline each week,gasoline consumption has increased.
• E) Because I washed my car Saturday morning,it rained Saturday afternoon.

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Definitions:

Sales Returns

Transactions where customers return previously purchased merchandise, resulting in a refund or credit.

Bad Debt Expense

An expense recorded to account for receivables that are not expected to be collected, reflecting credit losses in the financial statements.

Accounts Receivable

Outstanding payments from customers for goods or services a company has already delivered.

Average Collection Period

The average number of days it takes for a business to receive payments from its customers for invoices issued, indicative of the effectiveness of a company's credit and collection policies.