Economists believe that people respond to incentives in predictable ways. Therefore, if the government imposed a tax on each child born, you would expect that:

Question

Quizplus · Accepted Answer

When the cost of having children increases, fewer children would be born. This is because the tax acts as a disincentive for people to have children, so they would either delay having children until they can afford the tax or choose not to have children at all. Therefore, option D is the correct answer. Options A, B, and C are not realistic because they assume that people would continue to have the same number of children, which goes against the basic principle of economics that people respond to incentives.

Economists Believe That People Respond to Incentives in Predictable Ways