Pat Calculates That for Every Extra Dollar She Earns,she Owes

question 192

Multiple Choice

Pat calculates that for every extra dollar she earns,she owes the government 33 cents.Her total income now is $35,000,on which she pays taxes of $7,000.Determine her average tax rate and her marginal tax rate.

• A) Her average tax rate is 33% and her marginal tax rate is 20%.
• B) Her average tax rate is 20% and her marginal tax rate is 33%.
• C) Her average tax rate is 20% and her marginal tax rate is 20%.
• D) Her average tax rate is 33% and her marginal tax rate is 33%.

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Definitions:

Milk

A nutritious white liquid produced by the mammary glands of mammals, widely consumed as a beverage or used as an ingredient in cooking.

Utility Function

A representation in economics that captures a consumer's preference by assigning a utility value to different bundles of goods.

Pareto Optimal

A condition in resource allocation where it's unachievable to improve the standing of any party without detrimentally impacting another party or criterion of choice.

Endowment

The total resources available to an individual or entity, including assets, income, and wealth.