Chapter 1

Front 1

A. Fallacy of False Cause (or post-hoc fallacy) –

Back 1

“after this, therefore because of this” – assuming a causality that is incorrect, i.e. the Economics Dept. hires new faculty and enrollment increases – could have been caused by many other factors than the new hire

Front 2

B. Fallacy of Composition

Back 2

– what is true for the part is true for the whole – incorrectly assuming what is true in a specific case is true in general, i.e. an increase in price in one industry may increase profits in that industry. This may
not be so if prices in rise across all industries and lead to widespread inflation.

Front 3

C. Fallacy of Division

Back 3

– what is true for the whole is true for the part – incorrectly assuming that what is true in general is true for a specific case, i.e. low inflation may be good for the nation but could lead to unemployment in some areas.

Front 4

D. Dodging Values –

Back 4

hard to place #s on some things, and often avoided as a result, i.e. clean air, scenic views, quiet, wild species, natural environments

Front 5

E. Disciplinary Myopia

Back 5

– neglect of consideration for non-economic factors, i.e. cultural, religious, historical and societal values not included in analysis

Front 6

F. Bias

Back 6

– preconceptions that interfere with factual knowledge, i.e. oil companies make excessive profits, less government regulation is always preferred

Front 7

G. Loaded Terminology

Back 7

– choice of words to express a slant rather than a fact, i.e. obscene profits, excessive wages, corporate greed

Front 8

Positive v Normative Economics

Back 8

factual, what is vs subjective, what ought to be.

Front 9

Correlation v Causation

Back 9

Correlation is 2 events move in predictable way, but dont directly influence each other. Causation, 2 variables directly influence each other

Front 10

key macronomic issues

Back 10

stable prices, constant economic growth, full employment

Front 11

microeconomic ?'s

Back 11

1) what to produce?
2) how to produce?
-physical efficiency
-allocative efficiency
3) how to distribute?
-equity/fairness

Front 12

public goods and services

Back 12

Pure Public –goods and services only produced by government, i.e. national defense, lighthouses,
2. Quasi-Public -- goods and services produced in part by government and in part by the private sector, i.e. education, housing, medical care,

Front 13

elasticity determinants

Back 13

substitutes, proportion to income, amount of need, time