#23 - When a resource’s price reflects its full cost to society, consumers pay

[Administrator]

Complete Question Explanation

Justify the Conclusion. The correct answer choice is (A).

Answer choice (A): This is the correct answer choice.

Answer choice (B):

Answer choice (C):

Answer choice (D):

Answer choice (E):

This explanation is still in progress. Please post any questions below!

[ikim10]

I narrowed my answer choices down to (A) and (D). I diagrammed the stimulus as below:

RP = resource price
UH = unintended harm
SMR = sound management of resource

Premise: RP reflects full cost to society consumers pay UH to society
Premise: SMR RP deters misuse RP reflects UH to society

Conclusion: SMR RP reflects UH to environment

I originally had (A) because it was the only answer choice that contained the missing elements of UH to environment and UH to society, but changed my answer to (D) last minute because I thought the order of (A) was reversed.

I diagrammed (A) as:

UH to environment UH to society

But plugging this in does not allow me to draw the conclusion. I was looking for something like:

UH to society UH to environment.

That was why I chose (D). I thought "externalities are precisely assessed" = UH to society were itemized, i.e. split into types, including UH to environment.

Could you explain where I went wrong with diagramming (A)?

[Dana D]

Hey I Kim,

You did diagram this correctly - by telling us that UH to the environment = UH to society, answer choice (A) is letting us properly draw the conclusion of the argument, which as you correctly identified is SMR RP reflects UH to the environment.

Without the information provided in answer choice (A), why does sound management of a resource require us to reflect the unintended harm to the environment in our resource price? We know we have to reflect the unintended harm to society, but there's no mention of unintended harm to the environment - until we add in (A). Now we can say

SMR RP deters misuse RP reflects UH to the environment which means the RP also reflects UH to society

By equating the environment and society, answer choice (A) lets us justify the stimulus' conclusion.

Remember the Jusitfy Formula -

premise + [the correct answer choice] = Conclusion.

So in this case the premise is that sound management of a resource + answer choice (A), which is the idea that harm to the environment is also harm to society = the resource price must reflect any harm to the environment, because that is also harm to society, and resource prices must reflect any unintended harm to society in order to deter the misuse of the resource.

Hope that helps!

[flowerpower]

Does (A) represent a biconditional statement? I ended up choosing (A) because there was no other choice I liked, but I also thought it flipped the sides of the statement.

I thought (A) was not a biconditional statement since what constitutes harm to society doesn't necessarily also constitute harm to the environment, but it seems that is what the last response is implying. Thank you for the help!

[Jeff Wren]

Hi flowerpower,

I agree with you that harm to the environment is not synonymous with/identical to harm to society for the reason that you mentioned, so I wouldn't describe the relationship as biconditional. Instead I would describe harm to the environment as one type of harm to society based on the wording of Answer A.

While this may make the diagram for Answer A appear to be a Mistaken Reversal because one can have harms to society that are not harms to the environment, in the context of the argument, the term "externalities" refers to all "unintended but harmful consequences to society of using a resource." (Even though the word "all" is not explicitly used in the argument, "the externalities" means all of them, not just some of them.)

In other words, if Answer A is true, then the premise that states "the price of a resource deters misuse of that resource only if it reflects the resource’s externalities" would include any harms to the environment as part of those externalities.

[flowerpower]

Hi flowerpower,

I agree with you that harm to the environment is not synonymous with/identical to harm to society for the reason that you mentioned, so I wouldn't describe the relationship as biconditional. Instead I would describe harm to the environment as one type of harm to society based on the wording of Answer A.

While this may make the diagram for Answer A appear to be a Mistaken Reversal because one can have harms to society that are not harms to the environment, in the context of the argument, the term "externalities" refers to all "unintended but harmful consequences to society of using a resource." (Even though the word "all" is not explicitly used in the argument, "the externalities" means all of them, not just some of them.)

In other words, if Answer A is true, then the premise that states "the price of a resource deters misuse of that resource only if it reflects the resource’s externalities" would include any harms to the environment as part of those externalities.

Would you be able to describe this visually or diagram it somehow? I'm still not quite understanding how "if Answer A is true, then the premise that states 'the price of a resource deters misuse of that resource only if it reflects the resource’s externalities' would include any harms to the environment as part of those externalities." Not all that constitutes harm to society constitutes harm to the environment according to (A), since it only says all that constitutes to the environment constitutes harm to society.

[Jeff Wren]

Hi flowerpower,

I find it easier to think of "harms to the environment" as included in the broader category of "harms to society" rather than diagramming it as a separate term. You are right that not all harms to society constitute harms to the environment, but all harms to society (i.e. all externalities) would include all harms to the environment according to Answer A (as well as including other harms to society that are not harms to the environment).

Here's an example that may be helpful.

Every Snickers is a candy bar.

The diagram for this would be:

Snickers -> Candy Bar

It would be incorrect (specifically a Mistaken Reversal) to assume that every candy bar is a Snickers.

However, if we were talking about all candy bars, that group would include Snickers (as well as every other type of candy bar). For example, if someone wants to ban all candy bars, that would include Snickers.

This idea is basically parallel to what occurs in this question.

While any given harm to society may not be a harm to the environment, all harms to society would include harms to the environment (assuming that harms to the environment constitute harms to society as described in Answer A).

[flowerpower]

Hi flowerpower,

I find it easier to think of "harms to the environment" as included in the broader category of "harms to society" rather than diagramming it as a separate term. You are right that not all harms to society constitute harms to the environment, but all harms to society (i.e. all externalities) would include all harms to the environment according to Answer A (as well as including other harms to society that are not harms to the environment).

Here's an example that may be helpful.

Every Snickers is a candy bar.

The diagram for this would be:

Snickers -> Candy Bar

It would be incorrect (specifically a Mistaken Reversal) to assume that every candy bar is a Snickers.

However, if we were talking about all candy bars, that group would include Snickers (as well as every other type of candy bar). For example, if someone wants to ban all candy bars, that would include Snickers.

This idea is basically parallel to what occurs in this question.

While any given harm to society may not be a harm to the environment, all harms to society would include harms to the environment (assuming that harms to the environment constitute harms to society as described in Answer A).

Hi Jeff, thank you so much, this makes sense now!