Question

Define the Ramsey Rule.

Define the Ramsey Rule.

Homework Answers

Answer #1

The Ramsey rule states that the optimal taxes cause every good to have the same proportional reduction in compensated demand.

The Ramsey rule is derived by assuming that the government sets commodity taxes to maximize the utility of a single consumer subject to the chosen taxes generating a required level of tax revenue. This optimization determines the most efficient set of commodity taxes (they are efficient because the assumption of a single consumer implies there are no equity considerations).

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
4. Discuss the equity implications of the Ramsey Rule for optimal commodity taxation. How can these...
4. Discuss the equity implications of the Ramsey Rule for optimal commodity taxation. How can these equity issues be addressed, if at all? (300 words max.)
1.The Rule of Law (a) Define the rule of law. How does the rule of law...
1.The Rule of Law (a) Define the rule of law. How does the rule of law differ from law as the commands of the state? (b) Explain why the rule of law is “an ideal rather than a complete fact.” 2.Judicial Restraint Define the power of judicial review. How do advocates of judicial restraint exercise that power?
NPV, the IRR method, the payback rule, or the discounted payback rule. In your answer define...
NPV, the IRR method, the payback rule, or the discounted payback rule. In your answer define and describe each method, using formulas
For each of the following concepts:In 100 word define it and give an example. a. rule...
For each of the following concepts:In 100 word define it and give an example. a. rule b. rule control c. rule-governed behavior d. contingency control e. contingency-governed behavior (contingency-shaped behavior).
For the indicated units produced, Ramsey, LLC reported the costs shown below: Units produced: 8,200 2,700...
For the indicated units produced, Ramsey, LLC reported the costs shown below: Units produced: 8,200 2,700 Total direct material: $179,580 $59,130 Total direct labor: $139,400 $45,900 Total manufacturing overhead: $809,397 $703,797 Part A: Ramsey, LLC's variable manufacuring cost per unit for is closest to: $58.10 $38.90 $21.90 $19.20 $36.20 Part B: Ramsey, LLC 's fixed manufacuring cost is: $968,602 $651,957 $1,128,377 $808,827 Part C: at a level of 5,500 units, Ramsey, LLC's total manufacuring cost would be: $1,647,611 $756,838 $1,202,224...
Midland Petroleum is holding a stockholders’ meeting next month. Ms. Ramsey is the president of the...
Midland Petroleum is holding a stockholders’ meeting next month. Ms. Ramsey is the president of the company and has the support of the existing board of directors. All 12 members of the board are up for reelection. Mr. Clark is a dissident stockholder. He controls proxies for 42,001 shares. Ms. Ramsey and her friends on the board control 52,001 shares. Other stockholders, whose loyalties are unknown, will be voting the remaining 24,998 shares. The company uses cumulative voting. a. How...
Define H: R->R by the rule H(x) = x2, for all real numbers x. c) Is...
Define H: R->R by the rule H(x) = x2, for all real numbers x. c) Is H one-to-one correspondence? Explain b) Define K: Rnonneg->Rnonneg by the rule K(x) = x2, for all nonnegative real numbers x. Is K a one to one correspondence?
Define the following terms: 1. Probability 2. Hypothesis testing 3. Multiplication Rule 4. Addition Rule 5....
Define the following terms: 1. Probability 2. Hypothesis testing 3. Multiplication Rule 4. Addition Rule 5. Standard Normal Distribution 6. Null Hypothesis 7. Alternative hypothesis 8. Statistical significance 9. Type I error 10. Type II error 11. Nonparametric test 12. One-tailed hypothesis
Suppose we define the relation R on the set of all people by the rule "a...
Suppose we define the relation R on the set of all people by the rule "a R b if and only if a is Facebook friends with b." Is this relation reflexive?  Is is symmetric?   Is it transitive?   Is it an equivalence relation? Briefly but clearly justify your answers.
3. Samson Co. sold $4,000 of goods to Ramsey Co. on account. Ramsey later returned $500...
3. Samson Co. sold $4,000 of goods to Ramsey Co. on account. Ramsey later returned $500 of the goods purchased from Samson. Upon receipt of the returned merchandise, Samson should record a a. debit to Sales Returns and Allowances for $500. b. debit to Accounts Receivable for $500. c. debit to Cash for $500. d. credit to Sales for $500. 4. Use the following information for this question:                    June 1                 Inventory 100 @ $1.00                             6                 Purchased 150 @ $1.10                           13                 Purchased   50 @...