Refer to Scenario 19

question 229

Multiple Choice

Refer to Scenario 19.2 below to answer the question(s) that follow.
SCENARIO 19.2: An individual earning $40,000 pays $3,200 in taxes. The marginal tax rate on any income earned above $40,000 is 20%.
-Refer to Scenario 19.2. When this person earns $40,000, her average tax rate is

• A) 8%.
• B) 12.5%.
• C) 20%.
• D) indeterminate from this information.

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Definitions:

White-Collar Professionals

Employees known for performing jobs in an office setting that typically require a high level of education and professional skills.

Frictional Unemployment

Unemployment that occurs because job seekers and employers need time to find each other.

Graduating Harvard Law School

Graduating Harvard Law School signifies successfully completing a rigorous academic program at one of the world's prominent legal institutions, often leading to prestigious career opportunities.

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The act of looking for employment, due to unemployment, discontent with a current position, or a desire for a better position.