Refer to the Information Provided in Table 19 -Related to the Economics in Practice on Page 393: Refer

question 3

Multiple Choice

Refer to the information provided in Table 19.4 below to answer the question(s) that follow.
Table 19.4
$$\begin{array} { | c | c | } \hline \text { Total Income } & \text { Total Taxes } \\\hline \$ 10,000 & \$ 1,000 \\\hline 20,000 & 2,400 \\\hline 30,000 & 4,500 \\\hline 40,000 & 8,000 \\\hline\end{array}$$
-Related to the Economics in Practice on page 393: Refer to Table 19.4. At an income level of $10,000, the average tax rate is

• A) 1%.
• B) 5%.
• C) 10%.
• D) 20%.

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Definitions:

Price Elasticity of Demand

The responsiveness of the quantity demanded of a good to a change in its price, with all other factors being held constant.

Elastic

Describes a situation where the demand for a product significantly changes in response to changes in its price.

Absolute Value

A numerical value regardless of its sign, often represented as the distance of a number from zero on the numerical scale.

Price Inelastic

Describes a situation where the demand for a product does not significantly change with a price increase or decrease.