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The principle of second best states that a. if previously existing distortions exist, a distortionary tax may actually improve efficiency. b. taxes should be constructed
The principle of second best states that a. if previously existing distortions exist, a distortionary tax may actually improve efficiency. b. taxes should be constructed so that they are neutral. c. the broader based the tax, the less distortionary it is. d. the more inelastic the demand for a product, the less distortionary a tax on the product would be
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Microeconomics
Authors: David Besanko, Ronald Braeutigam
5th edition
1118572270, 978-1118799062, 1118799062, 978-1118572276
