Let's break down the problem and calculate the excess burden using the given values. Given: Initial income = 16 I=16 Initial price of good , = 1 x,p x =1 Initial price of good , = 4 y,p y =4 After a $3 per unit tax on good x, the new price of good , = 4 x,p x =4 Original utility 0 = 4 U 0 =4 Final utility 1 = 2 U 1 =2 Compensating variation (CV) = 16 Equivalent variation (EV) = 8 We need to find the excess burden (EB) using both the compensating variation (CV) and equivalent variation (EV). Step-by-Step Calculation: Excess Burden using Equivalent Variation (EBEV): Equivalent Variation (EV) is the amount of money that, if taken away from the consumer before the price change, would reduce their utility to the same level as after the price change. Calculate the total change in consumer surplus before and after the tax: Initial situation (no tax): 0 = 4 U 0 =4 Final situation (with tax): 1 = 2 U 1 =2 Equivalent variation (EV) = 8 means that, if income was reduced by 8 initially, the