Economics Question Review (2025-12-22)

1. This question is about Tautology.

(a) What is tautology?

(b) Explain any TWO instances of tautology in economic analysis.

Solution:

1. (a) A statement which is always true. Tautology explains nothing.

(b) Instance 1: The law of diminishing marginal return is onset when the curve of absolute returns f(x) become concave, i.e. f"(x) < 0.

No economists prove the causation behind.

Instance 2: Coase Theorem states that when the private property rights are well-defined, all stakeholders will internalize all the externalities caused by the transaction.

Again, no proof is given.

2. Explain why the elderly is always shameless.

Solution:

Because they have nothing more to lose. For example, the opportunity cost for a youngster to queue in McDonald's is always higher than that for an elderly.