Hu earns $120,000 per year. He is charged a 20% tax on the first $80,000 he earns. He is charged a 30% tax for any income he earns between $80,000 and $200,000. If he were to earn an extra $5,000 this year, what would his marginal tax rate be?
a. 10%
b. 20%
c. 23%
d. 30%
d. 30%
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An economy produces only 1,000,000 computers valued at $2,000 each. Of these, 200,000 are sold to consumers, 300,000 are sold to businesses, 300,000 are sold to the government, and 100,000 are sold abroad. No computers are imported. At the end of the year, the computer manufacturers hold the unsold computers in inventory. What is the value of GDP?
A. $2.0 billion B. $0.9 billion C. $1.0 billion D. $1.8 billion
On a graph with time on the horizontal axis and real GDP per capita on the vertical axis, the income levels of poorer countries are
a. diverging more from the incomes of rich countries. b. maintaining a constant gap with the incomes of richer countries. c. crossing the line representing richer countries. d. coming closer to the line representing richer countries.
A technological advance that increases labor productivity will
a. lower wages. b. decrease the demand for labor as fewer workers are needed. c. decrease the supply of labor as fewer workers are needed. d. increase the demand for labor as MP rises. e. decrease the demand for labor as MP falls.
Is it possible that trade could prevent the development of new and more efficient industries?
What will be an ideal response?