LSAT (Law School Admission Test)Reading ComprehensionMedium
Passage: "The 'broken window fallacy' in economics describes the idea that destroying something, and thus creating a need for its repair or replacement, stimulates the economy. The classic example involves a hooligan breaking a baker's window. The baker must then pay a glazier to repair it, creating business for the glazier. However, the fallacy lies in ignoring what the baker would have done with that money if the window hadn't been broken—perhaps bought new clothes, invested in equipment, or saved it. These 'unseen' expenditures represent lost opportunities for other sectors of the economy. Therefore, while the glazier benefits, society as a whole is not made richer; resources are merely diverted from one use to another. The fallacy underscores the importance of considering opportunity costs in economic analysis." Which of the following statements is most strongly supported by the passage regarding the 'broken window fallacy'?
- AIt illustrates how focusing on visible transactions can obscure unseen economic losses.
- BActs of destruction are always beneficial to the economy in the long run.
- CIt highlights the importance of considering only immediate economic gains.
- DIt demonstrates that wealth is created through destruction and subsequent repair.
Show answer & explanationAnswer & explanation
Correct answer: A. It illustrates how focusing on visible transactions can obscure unseen economic losses.
The passage explicitly states that the fallacy lies in 'ignoring what the baker would have done with that money' and refers to these as 'unseen' expenditures and 'lost opportunities.' It concludes that 'resources are merely diverted,' not created. Option D directly captures this central point: the fallacy is about overlooking the unseen consequences.
Why the other options are wrong
- B. The passage argues the opposite: destruction diverts resources, not always benefits the economy.
- C. The passage argues for considering 'unseen' costs, not just immediate gains.
- D. The passage explicitly refutes this, stating 'society as a whole is not made richer; resources are merely diverted'.
Strongest Support
Identifying the statement that is most directly and comprehensively substantiated by the information provided in the passage.
- Look for explicit statements or direct logical implications.
- Avoid options that generalize too broadly or introduce new information.
- The best answer will often summarize a key conclusion or principle.
Memory trick: The Passage's True Anchor.