Suppose the State of Wyoming Passes a Law That Increases

Multiple Choice

Suppose the state of Wyoming passes a law that increases the tax on cigarettes.As a result,smokers who live in Wyoming 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.