Page 5 of 8 13. The following statements provide an interpretation of the concept "excess burden". Excess burden can accurately be described as: I) the share of the tax borne by producers and consumers together. False II) the value to consumers of the lost output due to taxation. False III) the total value of the deadweight losses due to taxation. True A) only I F) II & III B) only II only III D) I & II E) I & III G) I, II & III H) none of the three 14. All other factors being equal, the less elastic the demand for a commodity: I) the larger the revenue raised through taxation. True II) the larger the buyers' share of the tax. True III the larger the excess burden of the tax. False A) only I B) only II F) II & III C) only III (D) & II E) I & III G) I, II & III H) none of the three 15-16. In the short run, a firm producing skyhooks has built plant and equipment that in total account for 96 units of physical capital. The firm's short run production function is given by the function 19 = 24(1 + 4 ) 2 Questions 15 through 16 concern this firm. 15. Suppose that the price of labour is $24 per unit and the price of capital is $2 per unit. In the short run. when L - 60, the average variable cost is: A) $4 B) $5 C) $6.50 0)$7.50 E) $8.25 F) $8.50 G) $10.50 H) $12 D $16 $24 16. Suppose that the price of labour is $24 per unit and the price of capital is $4 per unit. In the short run, when L = 60, the marginal cost is: A) $4 B) $5 C) $6.50 D) $7.50 E) $8.25 F) $8.50 G) $10.50 H) $12 $16 J) $24