Author Question: Suppose the tax rate on the first 10,000 income is 0 percent; 10 percent on the next 20,000; 20 ... (Read 52 times)

elizabeth18 · **on:** Jun 29, 2018

Suppose the tax rate on the first 10,000 income is 0 percent; 10 percent on the next 20,000; 20 percent on the next 20,000; 30 percent on the next 30,000; and 40 percent on any income over 80,000. Family A has income of 40,000.

What is the marginal and average tax rate for Family A? A) marginal10 percent; average10 percent
B) marginal20 percent; average10 percent
C) marginal25 percent; average20 percent
D) marginal20 percent; average25 percent

Question 2

In the labor market, adjustments to changes in supply and demand

A) usually occur instantly.
B) usually take time to occur.
C) do not apply, since the labor market does not respond to supply and demand forces.
D) do not apply, since wages in the labor market always go up.