Suppose a taxpayer has an income of $100,000 and a taxable income of $80,000, and pays taxes of $10,000. If the taxpayer talks of being taxed at a 10 percent rate, she is referring to the
A. Effective tax rate.
B. Nominal tax rate.
C. Average tax rate.
D. Marginal tax rate.
Answer: A
You might also like to view...
A cost-justified precaution is a safety measure whose
A) benefits outweigh its costs. B) costs outweigh its benefits. C) costs equal its benefits. D) costs are zero.
Which of the following goods is likely to have the highest price elasticity of demand?
A) Salt B) Gasoline C) Life-saving drugs D) Ketchup
The opportunity cost of going to an outdoor music festival is
A) the value of the time spent at the festival. B) zero because there are no overhead costs for an outdoor festival. C) equal to the highest value of an alternative use of the time and money spent on the festival. D) the enjoyment you receive from going to the festival. E) the cost of the festival ticket only.
The above figure shows Bobby's indifference map for soda and juice. B1 indicates his original budget line. B2 indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that
A) Bobby views soda as an inferior good. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) the income elasticity of demand for soda is 1.