Max Earned $1,019

question 1

Multiple Choice

Max earned $1,019.55 during the most recent semimonthly pay period.He is single with 1 withholding allowance and has no pre-tax deductions.Using the following table,how much should be withheld for federal income tax?

• A) $118.00
• B) $94.00
• C) $96.00
• D) $93.00

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Definitions:

Behavioral Economics

Behavioral economics studies how psychological, cognitive, emotional, cultural, and social factors affect the economic decisions of individuals and institutions and the consequences for market prices, returns, and resource allocation.

Availability Heuristic

An intellectual quick-step that employs readily recalled instances when contemplating a certain topic, notion, strategy, or judgment.

Endowment Effect

The phenomenon in which individuals value an owned object higher than its market value simply because they own it.

Prospect Theory

Prospect Theory is a behavioral economic theory that describes how people choose between probabilistic alternatives involving risk, where the probabilities of outcomes are known.