In analyzing the gasoline tax and subsidy policy discussed in the text, the final solution illustrates that
A)consumers are worse off than they were before the policy began.
B)consumers do not cut back on fuel consumption.
C)the government is made better off financially.
D)social welfare increases.

Question

Quizplus · Accepted Answer

Consumers are worse off than they were before the policy began because the gasoline tax increases the price they pay for fuel, reducing their consumer surplus.

In Analyzing the Gasoline Tax and Subsidy Policy Discussed in the Text