"For goods that are unrelated in consumption, efficiency requires that tax rates be inversely proportional to elasticities." This is the definition of
A)the Ramsey Rule.
B)the benefits-received principle.
C)the inverse elasticity rule.
D)the Corlett-Hague rule.

Question

Quizplus · Accepted Answer

The inverse elasticity rule states that for goods that are unrelated in consumption, efficiency requires that tax rates be inversely proportional to elasticities.

"For Goods That Are Unrelated in Consumption, Efficiency Requires That