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Suppose the state of VA passes a law that increases the tax on alcohol beverage. As a result, residents in VA start purchasing alcohol in
Suppose the state of VA passes a law that increases the tax on alcohol beverage. As a result, residents in VA start purchasing alcohol in surround 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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