Suppose the State of Illinois Passes a Law That Bans

question 39

Multiple Choice

Suppose the state of Illinois passes a law that bans smoking in restaurants.As a result,residents of Wisconsin who do not like breathing second-hand smoke begin driving across the border to Illinois to eat at restaurants there.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