Consider two workers, Ralph and Steve. Both of them work for the same employer, and each earns $15 per hour. Steve is taxed at the 15 percent marginal rate. However, Ralph is married, and due to his wife’s income, he is taxed at the 28 percent marginal rate. Using Figure 11.3, indicate which one would be expected to seek more health insurance and why.

Transcribed Image Text:

Total wages W M M' 45 W 1 0 U U A A' (45% I N 0 Insurance Figure 11.3 Impacts of Preferential Treatment of Employee Insurance