Solve the problem.The graph below shows the amount of income tax that a single person must pay on his or her income when claiming the standard deduction. Identify the income levels where discontinuities occur and explain the meaning of the discontinuities.Income Tax, 1000's of dollars
Income, 1000's of dollars
A. Discontinuities at x = $44,000 and x = $60,000. Discontinuities represent tax shelters.
B. Discontinuities at x = $22,000, x = $44,000, and x = $60,000. Discontinuities represent boundaries between tax brackets.
C. Discontinuities at x = $22,000, x = $44,000, and x = $60,000. Discontinuities represent tax cheating on the part of high-income earners.
D. Discontinuities at x = $44,000 and x = $60,000. Discontinuities represent boundaries between tax brackets.
Answer: B
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