Even If a Tax Imposed in a Market Generates a Loss

Multiple Choice

Even if a tax imposed in a market generates a loss in surplus for the participants in that market, the tax could still increase economic efficiency if:

A) voters approve of the tax.
B) the government needs to generate tax revenue.
C) the public expenditures financed by the tax lead to a big enough increase economic surplus.
D) the tax revenue is used to fund spending by local governments.