Suppose the government taxes 30 percent of the first $70,000 and 50 percent of all income above $70,000 . For a person earning $200,000 . the marginal tax rate is
a. 30 percent, and the average tax rate is 50 percent.
b. 30 percent, and the average tax rate is 43 percent.
c. 50 percent, and the average tax rate is 40 percent.
d. 50 percent, and the average tax rate is 43 percent.
d
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Suppose the Chicago Bears football team raises ticket prices by 13 percent and as a result the quantity of tickets demanded decreases by 21 percent. This response means that the demand for Bears tickets is
A) inelastic. B) elastic. C) unit elastic. D) perfectly inelastic. E) perfectly elastic.
Which is the most accurate statement?
A. If most economists had to choose between a tariff and a quota, she or he would choose a tariff as the lesser of two evils. B. Both tariffs and quotas are basically good for our economy because they keep out foreign imports. C. Tariffs and quotas are equally bad for our economy. D. Most economists prefer import quotas to tariffs.
Based on our understanding of the labor market model presented in Chapter 6, we know that a reduction in the markup will cause
A) an increase in the equilibrium real wage. B) a reduction in the equilibrium real wage. C) an increase in the natural rate of unemployment. D) a reduction in the natural rate of unemployment and no change in the real wage.
If the price of a good decreases by 5% and the quantity demanded remains unchanged, then at that price, the good is
A. elastic. B. perfectly elastic. C. inelastic. D. perfectly inelastic.