Suppose Last Year Moe Faced a 25% Marginal Tax Rate

question 54

Multiple Choice

Suppose last year Moe faced a 25% marginal tax rate.This year tax rates have increased and now Moe faces a 30% marginal tax rate.Moe may choose to work more hours this year because:

• A)working hours tend to increase over a worker's life in the United States.
• B)the opportunity cost of leisure has increased.
• C)the opportunity cost of leisure has fallen.
• D)he must work more hours to have the same after-tax income this year.

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Definitions:

Confederacy

The government formed by the southern states that seceded from the United States in 1861, leading to the American Civil War.

Thirteenth Amendment

The amendment to the United States Constitution that abolished slavery and involuntary servitude, except as punishment for a crime.

Abolished Slavery

The act of formally ending the practice of enslaving people, making it illegal to own slaves.

North American Continent

A vast geographical region comprising the countries of Canada, the United States, Mexico, and the nations of Central America, among others.