This Year, Tyrone Earned a Total of $9,000

question 51

Multiple Choice

This year, Tyrone earned a total of $9,000. As a result, he received $9,000 less in government transfers. Therefore, his implicit marginal tax rate is

• A) zero.
• B) 25 percent.
• C) 50 percent.
• D) 100 percent.

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Definitions:

Marginal Cost

The increase in total cost that arises from producing an additional unit of a good or service.

Average Variable Cost

The total variable costs (costs that change with the level of output) divided by the quantity of output produced.

Average Fixed Cost

The total fixed costs of production divided by the quantity of output produced, illustrating how fixed costs per unit change with output levels.

MC

Marginal Cost, the cost of producing one additional unit of a good.