Economists believe that people respond to incentives in predictable ways. Therefore, if the government imposed a tax on each child born, what would an economist expect to happen?

Question

Quizplus · Accepted Answer

If the government imposed a tax on each child born, this would increase the cost of having children. Therefore, families would be less likely to have as many children as they would have had without the tax. This is consistent with the law of demand, which says that as the price of a good (in this case, the "price" of having a child) rises, the quantity demanded of that good decreases.

Economists Believe That People Respond to Incentives in Predictable Ways