Suppose an economist tests the theory that when the price of…
Suppose an economist tests the theory that when the price of leather increases, fewer pairs of shoes are produced. He observes more shoes being produced when the price of leather increases. At the same time, a new production technology allowed for more shoes to be produced in less time. He has
Read Details“As soon as a mayor announced his/her ‘get tough on crime’ p…
“As soon as a mayor announced his/her ‘get tough on crime’ policy on New Year’s day, criminals got scared and the crime rate went down.” Suppose that the lower crime rate was actually caused by freezing cold temperatures in January⎯it was just too cold for anybody to be out robbing other people. Which fundamental hazard of the economic way of thinking did the mayor make?
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