When a Tax Is Levied on a Good

question 52

Multiple Choice

When a tax is levied on a good,

• A)government collects revenues which might justify the loss in total welfare.
• B)there is a decrease in the quantity of the good bought and sold in the market.
• C)a wedge is placed between the price buyers pay and the price sellers effectively receive.
• D)All of the above are correct.

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