Principle 4: HUMAN RESPONSE TO STIMULUS
People make decisions based on a comparison of costs and benefits, so their behavior may change when the benefits or costs change. Meaning that people respond to stimuli,
eg grapefruit prices rise, fewer people decided to eat more grapefruit, because the cost for the purchase of grapefruit has increased. At the same time farmers hire more workers grapefruit and grapefruit harvest more than the profit gained from selling grapefruit rose
Public Policy:
+ Change the cost or benefits
+ Changing personal behavior
Principle 5: TRADE CAN mAKE eVERYONE BENEFITS
Trade allows each person to specialize in their work
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