Question

While pollution regulations yield the benefit of a cleaner environment and the improved health that comes with it, the regulations come at the cost of reducing the incomes of the regulated firms’ owners, workers, and customers. This statement illustrates the principle that _______.

a. people face tradeoffs.b. rational people think at the margin.c. people respond to incentives.d. trade can make everyone better off.

Answer 1

a. people face tradeoffs.

Step-by-step explanation:

Tradeoffs means sacrificing something in order to achieve another thing.

Firms are sacrificing some of their profits in order to have an healthier and cleaner environment.

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