A friend (who has studied a bit of economics) has been watching you study in this course.She has seen the Ramsey Rule in your notes and says the following: "OK, I can see that it is much better to tax goods with a low elasticity of demand.Why don't we eliminate all other taxes and simply collect revenue by levying taxes on goods with low elasticities of demand?" what would you tell your friend?

The same friend tells you that she has seen that there are losses in the tax system because of administrative costs, compliance costs, and efficiency losses.S/he tells you that s/he is confused about the differences among these different costs.what would you tell your friend?