Which of the following is TRUE about the Ramsey Rule? The deadweight loss per dollar of tax revenue generated from commodity taxes is equal to the deadweight loss per dollar of tax revenue generated from income taxes.
1) The Ramsey Rule states that the deadweight loss per dollar of tax revenue generated from commodity taxes is greater than the deadweight loss per dollar of tax revenue generated from income taxes.
2) The Ramsey Rule states that the deadweight loss per dollar of tax revenue generated from commodity taxes is less than the deadweight loss per dollar of tax revenue generated from income taxes.
3) The Ramsey Rule states that the deadweight loss per dollar of tax revenue generated from commodity taxes is equal to the deadweight loss per dollar of tax revenue generated from income taxes.
4) The Ramsey Rule states that the deadweight loss per dollar of tax revenue generated from commodity taxes is not related to the deadweight loss per dollar of tax revenue generated from income taxes.
