A fallacy is the use of invalid or otherwise faulty reasoning, or "wrong moves", in the construction of an argument, which may appear stronger than it really is if the fallacy is not spotted.Important PointsThe fallacy of equivocation occurs when a key term or phrase in an argument is used in an ambiguous way, with one meaning in one portion of the argument and then another meaning in another portion of the argument.A standard three-step syllogism uses three terms ” the things that are being linked by the line of reasoning. If A, then B. If B, then C. Therefore if A, then C. The fallacy of four terms occurs when, exactly like it says, four terms are used instead of three. In most cases, a single term (B) is used two (or more) times, in different contexts with different meanings; and yet the argument treats the two usages as exactly the same since the same term was used.It's best explained by the given example.A dry crust of bread is better than nothingBut nothing is better than a big juicy steak.Therefore, a dry crust of bread is better than a big juicy steak.This uses two different meanings of the word "nothing." The first line uses "nothing" to mean "a lack of food", while the second line uses "nothing" as "no such thing exists."Similarly in the given example "All people who live in Varanasi are people who drink tea, and all people who drink tea are people who like it. We may conclude, then, that all people who live in Varanasi are people who like it."There is an equivocation on the term "People who like it." because the same term is used in two different ways, It commits the fallacy of four terms making four distinct terms, although only appearing to be three.Hence only (A) and (D) is correct.Additional InformationThe existential fallacy occurs when we erroneously suppose some class or group has members. In other words, statements may be true about classes or groups even if no members of the class or group exist.