I rarely talk economics at home (for some reason, some people think this shit's boring). So I'm always pleasantly surprised and immensely proud when one of my kids uses economic reasoning in a conversation.
To whit, here is a paraphrase of a conversation I had with the offical second oldest daughter of env-econ (OSODEE)–she's 13–last night while waiting in line at United Dairy Farmer's to get ice cream.
OSODEE: (pointing to the display behind the counter) Are those cigarettes really $58.00 per pack?
ME: Oh no, that's the price per carton. They are $5.75 per pack.
OSODEE: Why don't they just make them illegal? Or does the government just like to collect the taxes?
ME: I'm sure a politician would tell you they are raising the price to decrease the number of cigarettes people buy.
OSODEE: But that doesn't make sense, people will just smoke anyway, they just want the tax money.
Me (smiling proudly at her cynicism and her unintentional recognition of the inelastic demand for cigarettes): Well, what would you do?
OSODEE: I would make cigarettes illegal and tax ice cream. Everyone would still buy ice cream.
Me (recognizing a teaching opportunity when I see it): But don't you think if they raise the price of ice cream, some people will switch to buying candy bars or cupcakes instead?
OSODEE (realizing the problem): Yeah…probably…then I say we just put a small tax on everything. People will still buy things if the price of everything goes up just a little.
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