Question

To fully understand how taxes affect economic well-being, we must compare the

a) consumer surplus to the producer surplus.

b) price paid by buyers to the price received by sellers.

c) reduced welfare of buyers and sellers to the revenue raised by the government.

d) consumer surplus to the deadweight loss.

Answer 1

To fully understand how taxes affect economic well-being, we mustcompare....

the reduced welfare of buyers and sellers to the amount of revenue the government raises.