Mr. McCain pays $1,000,000 in federal income tax. How much is his marginal tax rate?
What will be an ideal response?
35%
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Shooting Star Books is a small publishing company that specializes in science fiction books. Like most publishers, Shooting Star releases new books in hardcover form and later releases paperback versions of the books
The marginal cost of printing both types of books is $2 per book, and Shooting Star maximizes profits by practicing intertemporal price discrimination. The annual demand for recently released (hardcover) books is Q1 = 400 - 10P1 where quantity demanded is measured in thousands of books and price is measured in dollars per book. The annual demand for the paperback version of previously released books is Q2 = 800 - 40P2. a. What are the marginal revenue curves associated with the two demand curves for books? b. What are the profit maximizing prices for hardcover and paperback books? What are the quantities of books demanded at these prices for hardcover and paperback books? c. Suppose the market demand for paperback books shifts to Q2 = 150 - 100P2. How does this change affect the profit maximizing price and quantity in the paperback book market? Does this change affect the profit maximizing outcome in the hardcover book market?
Which of the following Federal Reserve chairs had the longest tenure?
a. Alan Greenspan. b. Paul Volcker. c. Milton Friedman. d. Arthur Laffer.
What is the shape of the expected-rate-of-return curve as presented in this chapter? Why does it have this shape?
What will be an ideal response?
Refer to Scenario 9.4 below to answer the question(s) that follow. SCENARIO 9.4: Sponsors invest $100,000 in a new deli on the promise that they will earn a return of 10% per year on their investment. The deli sells 52,000 sandwiches per year. The deli's fixed costs include the return to investors and $42,000 in other fixed costs. Variable costs consist of wages ($1,000 per week) plus materials, electricity, etc. ($2,000 per week). The deli is open 52 weeks per year.Refer to Scenario 9.4. Suppose the average price per sandwich is $5.50. What is the annual profit of the deli?
A. -$22,000 B. $78,000 C. $130,000 D. $244,000