Suppose that the government taxes income in the following fashion: 20 percent of the first $50,000 . 40 percent of the next $50,000 . and 60 percent of all income over $100,000 . Marshall earns $200,000 . and Lily earns $600,000 . Which of the following statements is correct?
a. Marshall's marginal tax rate is higher than Lily's marginal tax rate.
b. Marshall's average tax rate is higher than his marginal tax rate.
c. Lily's average tax rate is higher than her marginal tax rate.
d. Lily's average tax rate is higher than Marshall's average tax rate.
d
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If the federal funds rate ________.
A. decreases, the prime rate will not change B. increases, the prime rate will decrease C. increases, the prime rate will increase D. decreases, the prime rate will increase
The above figure shows the market for finish carpenters in Bozeman. If there is a minimum wage set at $18, then there will be
A) unemployment of 200 workers. B) a surplus of 200 workers. C) unemployment of 400 workers. D) a surplus of 400 workers. E) no unemployment of workers and no surplus of workers.
An increase in unearned income always creates a disincentive to work
Indicate whether the statement is true or false
A drought destroys much of the peach crop. As a result, consumer surplus in the peach market:
a. increases. b. decreases. c. remains unchanged. d. equals the deadweight loss increase.