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

Multiple Choice

Assume that a tax is levied on a good and the government uses the revenue to clean up lethal toxic waste that would cause irreparable harm to a large number of people.In this case there would be:

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 probable increase in the total economic welfare of society
D) all of the above would occur