When a Good Is Taxed

question 56

Multiple Choice

When a good is taxed,

• A)both buyers and sellers of the good are made worse off.
• B)only buyers are made worse off, because they ultimately bear the burden of the tax.
• C)only sellers are made worse off, because they ultimately bear the burden of the tax.
• D)neither buyers nor sellers are made worse off, since tax revenue is used to provide goods and services that would otherwise not be provided in a market economy.

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