If a Worker Who Earns $30,000 Per Year Pays $6,000

question 317

Multiple Choice

If a worker who earns $30,000 per year pays $6,000 in taxes, while a worker who earns $50,000 per year pays $9,000 in taxes, this income tax would represent a _____ tax.

• A) flat
• B) lump-sum
• C) progressive
• D) regressive

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Definitions:

Average Variable Cost

The total variable costs divided by the quantity of output produced, indicating the average amount spent on variable costs per unit of output.

Variable Costs

Expenses that fluctuate in direct proportion to changes in production volume or activity levels, including costs like raw materials and direct labor.

Cost Curves

Graphical representations that show how the cost of producing goods changes with changes in the quantity of production.

Profit Maximization

The system by which a business calculates the price and output that lead to the highest earnings.