Suppose George made $20,000 last year and that he lives in the country of Harmony. The way
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Suppose George made $20,000 last year and that he lives in the country of Harmony. The way Harmony levies income taxes, each citizen must pay 10% in taxes on their first $10,000 in earnings and then 50% in taxes on anything else they might earn. So given that George earned $20,000 last year, his marginal tax rate on the last dollar he earns will be __________ % and his average tax rate for his entire income will be _________________.
a. 50 %; 50 %
b. 50 %; less than 50 %
c. 10 %; 50 %
d. 10 %; less than 50 %
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Microeconomics Principles, Problems and Policies
ISBN: 978-1259450242
20th edition
Authors: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn
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