Table 12-12 -Refer to Table 12-12. If the Government Imposes a $2,000

question 276

Multiple Choice

Table 12-12
-Refer to Table 12-12. If the government imposes a $2,000 lump-sum tax, the average tax rate for Marcia and Charles would be

• A)5 percent and 6.7 percent, respectively.
• B)8 percent and 6 percent, respectively.
• C)12 percent and 9 percent, respectively.
• D)13 percent and 10 percent, respectively.

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Definitions:

Profit-maximizing

The process by which a firm determines the price and output level that returns the greatest profit.

Selling Price

The amount of money for which a product or service is sold to customers.

Wage Rate

The standard amount of compensation given to employees for their labor, usually expressed per hour or per unit of work done.

Marginal Wage Cost

The additional cost incurred by hiring one more unit of labor, reflecting the change in total wage expenses.