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Question:

Assume that the supply of ethanol is relatively more elastic than the demand for ethanol. Compared to an initial competitive equilibrium in the market for ethanol, the imposition of a per-gallon tax on producers of ethanol will most likely decrease:

A producer surplus by less than it reduces consumer surplus.
Explaination

Regardless of whether a tax is imposed on suppliers or consumers, the relative burden of the tax to each depends on the relative elasticities of supply and demand. Since demand is relatively less elastic than supply, the burden of the tax will be greater on consumers than on producers. These burdens are equivalent to decreases in producer and consumer surpluses. Total consumer and producer surpluses will be reduced by the amount of the resulting deadweight loss in addition to the total amount of tax collected.