-Refer to Figure 17-1. Area E + H represents
A) the portion of sales tax revenue borne by consumers.
B) the portion of sales tax revenue borne by producers.
C) the excess burden of the sales tax.
D) sales tax revenue collected by the government.

Question

-Refer to Figure 17-1. Area E + H represents
A) the portion of sales tax revenue borne by consumers. 
B) the portion of sales tax revenue borne by producers. 
C) the excess burden of the sales tax. 
D) sales tax revenue collected by the government.

Quizplus · Accepted Answer

Area E + H represents the excess burden of the sales tax, which is the loss in economic efficiency that occurs when the tax distorts consumer and producer behavior, leading to a reduction in the total surplus.