Question suppose the state of iowa passes a law that, Ask an Expert

Economics

Question: Suppose the state of Iowa passes a law that increases the price of cigarettes by $1 per pack. As a result, residents in Iowa start purchasing their cigarettes in surrounding states. Which of the following principles does this best illustrate?

a. People respond to incentives

b. Rational people think at the margin

c. Trade can make everyone better off

d. Markets are usually a good way to organize economic activity

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M93116297

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