The Net Loss to Society from a Tax on a Product

question 47

Multiple Choice

The net loss to society from a tax on a product can be measured as:​

• A)​the loss in consumer surplus.
• B)​the loss in producer surplus.
• C)​the loss in both consumer and producer surplus.
• D)​the difference between the loss in consumer and producer surplus and the gain in tax revenue.

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Definitions:

Yards

A unit of length in the Imperial and US customary systems, equal to 3 feet or 0.9144 meters.

Meters

The base unit of length in the International System of Units (SI), equivalent to 100 centimeters.

Milliliters

A unit of volume in the metric system, equal to one-thousandth of a liter.

Liters

A metric unit of volume equal to one cubic decimeter, commonly used to measure fluids.