Figure 8-22 -Refer to Figure 8-22.Suppose the Government Initially Imposes a $3

Multiple Choice

Figure 8-22
-Refer to Figure 8-22.Suppose the government initially imposes a $3 per-unit tax on this good.Now suppose the government is deciding whether to lower the tax to $1.50 or raise it to $4.50.Which of the following statements is not correct?

A) Compared to the original tax,the larger tax will decrease tax revenue.
B) Compared to the original tax,the smaller tax will decrease deadweight loss.
C) Compared to the original tax,the smaller tax will decrease tax revenue.
D) Compared to the original tax,the larger tax will increase deadweight loss.