Question

Logging companies are always more profitable if they are able to harvest more (rather than less) lumber in a month. If you conclude from that fact that the logging industry is more profitable if all of the firms in the industry harvest more then you would be:______a. Rightb. Wrong because causation and correlation are not the same C . Wrong and have fallen victim to the fallacy of composition d. Wrong because firms operate on jealousy

Answer 1

Answer:

The correct answer is letter "C": Wrong and have fallen victim to the fallacy of composition.

Explanation:

The fallacy of composition is a conclusion provided by an individual that assumes just because something applies in part of a whole, the same will apply to the whole. The conclusion does not have enough support and does not take into consideration variables that could change among one part and another of the whole.

Thus, if you conclude that because the logging companies are more profitable when they increase their output all the companies in another different sector should be profitable if they rise their output as well, you would have fallen into the fallacy of composition.