When a tax is imposed on a good or service,the
A) revenue gained by the government is the excess burden.
B) deadweight loss that arises from a tax is the excess burden.
C) share of the tax paid by the buyer is the excess burden.
D) share of the tax paid by the seller is the excess burden.
E) amount the government collects as tax revenue is the deadweight loss from the tax.

Question

Quizplus · Accepted Answer

The deadweight loss that arises from a tax is the excess burden. This loss occurs because taxes can change the behavior of buyers and sellers, leading to a loss in economic efficiency. The tax revenue gained by the government is not the excess burden, nor are the shares of the tax paid by the buyer or seller. The government's tax revenue is not the deadweight loss from the tax, as the loss occurs separately due to the inefficiency created by the tax.

When a Tax Is Imposed on a Good or Service,the