Sales Tax
The following questions refer to the accompanying diagram shows the effects of a sales tax imposed on consumers. The initial price and quantity are P0 and Q0, respectively. After the tax is imposed, the equilibrium quantity is Q1, firms receive the price Ps, and consumers pay the price Pd.
-Refer to Sales Tax.Prior to the sales tax,which of the following was false?
A) Consumer surplus was A+B+C+D+E.
B) Producer surplus was F+G+H+I+J.
C) Government tax revenue was zero.
D) Dead-weight loss was zero.
Correct Answer:
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