Raising taxes and increasing welfare payments:?

Question

a. proves that there is such a thing as free lunch

b. improves efficiency at the expense of equity

c. improves equity at the expense of efficiency

d. reduces market power

e. does none of these answers

Answer 1

Raising taxes and increasing welfare payments improves equality at the expense of efficiency.
- Distribution of tax money to poor/low income people through welfare payments help balancing poor and rich.
- Paying more taxes discourage people to work harder.