[Solved] Taxation may improve the social welfare when the taxed good A)is socially undesirable (like, in some views, liquor and pornography). B)imposes negative externalities. C)is overproduced under a free-market system. D)All of the above are correct. Tax Revenue: The income that is gained by governments through taxation of individuals and businesses. Tax Policy: The set of laws and regulations that govern how taxes are collected, managed, and utilized by the government. Production Possibilities Frontier: The production possibilities frontier (PPF) is a curve depicting all maximum output possibilities for two goods, given a set of inputs. Societal Welfare: The overall well-being and quality of life of the people in a society, often considered in terms of economic, social, and environmental indicators.