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

question 166

Multiple Choice

Solve the problem. Refer to the table if necessary. 2013 Marginal Tax Rates, Standard Deductlons, 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.
-Ken is head of household with a dependent child and a taxable income of $91,691. He also is entitled to a $1000 tax credit. Calculate the amount of tax owed.

• A)$17,063
• B)$16,425
• C)$17,425
• D)$21,923

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Definitions:

Total Utility

The cumulative satisfaction or usefulness that a person gains from consuming all units of a particular good or service.

Marginal Utility

The supplementary enjoyment or value obtained by consuming an extra unit of a good or service.

Total Utility

The overall satisfaction or happiness a consumer derives from consuming a certain quantity of goods and services.

Marginal Utility

The extra benefit or utility gained from acquiring or consuming an additional unit of a product or service.