Assume that a tax is levied on a good and the government uses the funds to build statues of the premiers of each of the provinces and territories.In this case,which of the following would NOT occur
A)a decrease in consumer surplus to consumers of the taxed good
B)a decrease in producer surplus to producers of the taxed good
C)a decrease in the welfare of society that exceeds the deadweight loss from the tax
D)a deadweight loss larger than the loss in both consumer and producer surplus

Question

Quizplus · Accepted Answer

A deadweight loss is the loss of economic efficiency when the equilibrium outcome is not achieved. It is typically smaller than the total loss in consumer and producer surplus, as it represents the net loss after accounting for the tax revenue collected by the government.

Assume That a Tax Is Levied on a Good and the Government