When a Good Is Taxed

Multiple Choice

When a good is taxed,

A) both buyers and sellers of the good are made worse off.
B) only buyers are made worse off, because they ultimately bear the burden of the tax.
C) only sellers are made worse off, because the government holds them responsible for sending in the tax payments.
D) neither buyers nor sellers are made worse off, since tax revenue is used to provide goods and services that would otherwise not be provided in a market economy.