Suppose the tax rate on the first $10,000 income is 0 percent; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $30,000; and 40 percent on any income over $80,000. Family A has income of $40,000 What is the marginal and average tax rate for Family A?
A) marginal—10 percent; average—10 percent
B) marginal—20 percent; average—10 percent
C) marginal—25 percent; average—20 percent
D) marginal—20 percent; average—25 percent
B
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A) increasing. B) decreasing. C) constant. D) negative.
If people can benefit from a good even if they do not pay for it, the good is nonrival
Indicate whether the statement is true or false
Assume the properties of normal indifference curves. Where will a consumer maximize their utility?
What will be an ideal response?
If a policy helps some but harms others
A) the result is a Pareto improvement for the people who are helped. B) then the cost-benefit analysis will show a net increase in surplus and is therefore desirable. C) we cannot use the Pareto principle to evaluate whether or not the policy is desirable. D) it is too hard to determine whether or not the outcome is desirable.