Solve the Problem $15 \%$ Marginal Rate Affects Income Starting At $\$ 8925$

question 32

Multiple Choice

Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductions, and Exemptlons**


- Each higher marginal rate begins where the prior one leaves off. For example, for a single person, the $15 \%$ marginal rate affects income starting at $\$ 8925$ , which is where the $10 \%$ rate leaves off, and continuing up to $\$ 36,250$ .
" This table ignores the effects of (i) exemption and deduction phase-outs that apply to high-income taxpayers and (ii) the alternative minimum tax (AMT) that affects many middle- and high-income taxpayers.
-Your deductible expenditures $4146 for contributions to charity and $635 for state income taxes. Your filing status entitles you to a standard deduction of $6100. Should you itemize your
Deductions rather than claiming the standard deduction? If so, what is the difference?

• A)No, you are better off with the standard deduction.
• B)Yes, $4781
• C)Yes, $2589
• D)Yes, $1319

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Definitions:

Labor Demand

The overall quantity of workers whom employers are ready and able to employ at a specified pay rate within a given period.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource, considering all other factors constant.

Purely Competitive

A market structure characterized by many buyers and sellers, none of whom can influence market prices, with free entry and exit from the market.

Product Price

The amount of money required to purchase a good or service, determined by factors such as cost of production, market demand, and competition.