Which of the Following Statements Describes the Correct Relationship Between

question 97

Multiple Choice

Which of the following statements describes the correct relationship between marginal and average tax rates in a progressive tax system?

• A)The marginal tax rate is higher than the average tax rate.
• B)The average tax rate is higher than the marginal tax rate.
• C)The marginal and average tax rates are the same.
• D)The average tax rate will always be half of the marginal tax rate.

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Definitions:

Opportunity Cost

The expense incurred by not choosing the second-best option available during decision-making.

Marginal Product

The additional output produced as a result of employing one more unit of a particular input, assuming all other inputs remain constant.

Total Cost

The complete cost of production, including both fixed and variable costs, incurred by a business in the production of goods or services.

Input Price

The cost of resources or raw materials used in the production of goods and services.