Use the Following to Answer Questions: This Table Shows Data

question 103

Multiple Choice

Use the following to answer questions: This table shows data on taxes paid by three individuals living in each of three countries: A, B, and C. The tax paid in dollars is based on the marginal tax rates assessed in each of the three countries. Assume that each individual earns an income of exactly $37,000 and there are no deductions or exemptions that need to be applied.
Table: A Cross-Country Comparison $\begin{array}{cccccc}\text { COUNTRY A } & &\text { COUNTRY B } && \text { COUNTRY C }\\\hline \begin{array}{c}\text { Household } \\\text { Income }\end{array} & \begin{array}{c}\text { Tax Paid } \\\text { In Dollars }\end{array} & \begin{array}{c}\text { Household } \\\text { Income }\end{array} & \begin{array}{c}\text { Tax Paid } \\\text { In Dollars }\end{array} & \begin{array}{c}\text { Household } \\\text { Income }\end{array} & \begin{array}{c}\text { Tax Paid } \\\text { In Dollars }\end{array} \\\hline \$ 5,000 & \$ 1,000 & \$ 5,000 & \$ 500 & \$ 5,000 & \$ 500 \\15,000 & 1,000 & 15,000 & 2,250 & 15,000 & 1,500 \\25,000 & 1,000 & 25,000 & 5,000 & 25,000 & 2,500 \\35,000 & 1,000 & 35,000 & 8,750 & 35,000 & 3,500\end{array}$
-(Table: A Cross-Country Comparison) According to the data in the table, which countries have a progressive tax system?

• A) A and B only
• B) B and C only
• C) B only
• D) None of the countries has a progressive tax system.

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Definitions:

Perfectly Price Elastic

Describes a situation where the quantity demanded or supplied changes infinitely in response to any change in price.

Luxury Good

A high-end item that is not necessary for living but is deemed as highly desirable within a culture or society.

Baseball Cards

Collectible items featuring baseball players that are traded and collected by enthusiasts.

Price Inelastic

Describes a situation where the quantity demanded or supplied of a good or service changes by a smaller percentage than the percentage change in price.