1. a. Describe the Ramsey rule. b. Explain why imposing a higher tax on inelastic goods...
1. a. Describe the Ramsey rule.
b. Explain why imposing a higher tax on inelastic goods is a regressive tax.
2. a. What is the equation for Hotelling’s Rule?
b. What is marginal user cost (MUC)? Why does it increase over time?
c. Do firms take user cost into account when they are making production decisions? Why or Why not?
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1. a. Describe the Ramsey rule.
b. Explain why imposing a higher tax on inelastic goods...
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