The Inefficiency of a Sales Tax on a Good Is

question 2

Multiple Choice

The inefficiency of a sales tax on a good is ultimately the result of the

• A) low tax revenue earned by the government relative to the cost of collection.
• B) wedge between what buyers pay for the good and what sellers receive for the good.
• C) buyers being unable to avoid paying the tax.
• D) sellers being unable to avoid paying the tax.
• E) increase in the consumer surplus that is more than offset by the decrease in the producer surplus.

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