Question
What phrase describes the mistaken belief that a good deal for one person will be equally good if everybody makes the same deal? A. Error of goodwill B. Fallacy of composition C. Hourglass economy D. Anti-business practices
Answer
4.3
(108 Votes)
Darcy
Master · Tutor for 5 years
Answer
B. Fallacy of composition
Explanation
The question relates to a concept in economics, specifically involving logical fallacies in economic reasoning. The key to answering this question lies in understanding each of the provided options:1. **Error of goodwill**: This term does not specifically relate to an economic concept or fallacy. Goodwill generally refers to the intangible asset of a business, not to a fallacy in economic reasoning.2. **Fallacy of composition**: This is a logical fallacy that arises when one assumes that what is true for a member of a group is true for the group as a whole. In economics, this fallacy occurs when one assumes that what is good for an individual is also good for the society or economy at large. For instance, saving money might be good for an individual, but if everyone starts saving and not spending, it could lead to a decrease in demand and economic slowdown.3. **Hourglass economy**: This term generally refers to an economic structure where the middle class is shrinking, leading to a concentration of wealth at the top and a large lower economic class, resembling an hourglass shape. It does not specifically refer to a logical fallacy.4. **Anti-business practices**: These are practices that are perceived to be against the interests of the business community, like excessive regulation or high taxation. This term does not directly refer to a logical fallacy in economic reasoning.Based on these definitions, the term that best describes the mistaken belief that a good deal for one person will be equally good if everybody makes the same deal is the "Fallacy of composition." This is because this fallacy directly deals with the incorrect assumption that individual benefits or actions will translate to collective benefits or actions in the same way.