Which of the following is true?
A)Virtually all theories in economics are expressed using a ceteris paribus ("let everything else be equal" or "holding everything else constant") assumption.
B)The fallacy of composition is that, even if something is true for an individual, it is not necessarily true for many individuals as a group.
C)One must always be careful not to confuse correlation with causation.
D)Positive analysis involves statements about what is or what is likely to happen.
E)All of the answers are true.

Question

Quizplus · Accepted Answer

All of the statements are true. A is true because ceteris paribus assumption is used extensively in economic analysis. B is true because the fallacy of composition arises when individuals assume that what is true for one individual will be true for everyone in a group. C is true because correlation does not imply causation, and confusing the two can lead to incorrect conclusions. D is true because positive analysis involves making statements about what is likely to happen based on evidence and data, while normative analysis involves making value judgments.

Which of the Following Is True