Suppose the government taxes 25 percent of the first $60,000 of income and 40 percent of all income above $60,000 . For a person earning $200,000 . the marginal tax rate is
a. 25 percent, and the average tax rate is 32.5 percent.
b. 25 percent, and the average tax rate is 36 percent.
c. 40 percent, and the average tax rate is 32.5 percent.
d. 40 percent, and the average tax rate is 36 percent.
d
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Which of the following is a common mistake consumers commit when they make decisions?
A) They take into account nonmonetary opportunity costs but ignore monetary costs. B) They sometimes value fairness too much. C) They are overly pessimistic about their future behavior. D) They fail to ignore sunk costs.
Which of the following statements is TRUE about a non-cooperative game?
A) When two players each have a dominant strategy, joint profits may not be maximized. B) When two players each have a dominant strategy, joint profits are maximized. C) When players use their best responses, joint profits are maximized. D) None of the above.
If a consumer must spend her entire income on some combination of two commodities and chooses to spend it all on just one of the commodities then:
A) the other commodity is an economic bad. B) the other commodity must have zero marginal utility. C) the other commodity generates less utility per dollar spent on the good. D) the two commodities must be perfect substitutes.
For activities in which the benefits are concentrated and the costs widespread, governments are likely to undertake
a. too little of these activities relative to what would be efficient. b. too much of these activities relative to what would be efficient. c. exactly the amount of these activities that would be efficient. d. none of these activities.