A tax:A) generates tax revenue and causes deadweight loss.B) increases consumer and producer surplus.C) produces revenue for the government and increases total surplus.D) is always efficient.

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Emily Duncan · Accepted Answer

Final Answer : A, Explanation :  A tax generates tax revenue for the government but also causes deadweight loss. Deadweight loss is the loss of economic efficiency that occurs when the equilibrium quantity of a good or service is not consumed due to a tax. While a tax may increase government revenue, it also results in a net loss to society in terms of reduced economic efficiency. Therefore, option A is the best choice. Options B and C are incorrect because they do not include the negative impact of deadweight loss. Option D is incorrect because taxes are not always efficient.

A tax:

A) generates tax revenue and causes deadweight loss.
B) increases consumer and producer surplus.
C) produces revenue for the government and increases total surplus.
D) is always efficient.

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