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1. (a) Discuss what is the link between (i) commodity taxation and deadweight loss, (ii) commodity taxation and substitution effects (b) Explain the commodity taxation
1. (a) Discuss what is the link between (i) commodity taxation and deadweight loss, (ii) commodity taxation and substitution effects (b) Explain the commodity taxation and Ramsey rule. What is the implication of the Ramsey rule on taxation policy in practice (c) Based on the Mirrlees Model, explain what would happen (i) if the government increase the income bracket for the high wage earners, (ii) if the government increased tax rate on lower income group
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