Assume a Company Pays Tax at a Rate of 15

question 4

Multiple Choice

Assume a company pays tax at a rate of 15% on its first $50,000 of income.Any income above $50,000 is taxed at 25%.If a company has $75,000 of taxable income,which of the following statements is correct?

• A) Its marginal tax rate is 15%.
• B) Its average tax rate is 25%.
• C) Its marginal tax rate is 18.33%.
• D) Its average tax rate is 18.33%.

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Definitions:

Garbage Disposal

A device installed under a kitchen sink that shreds food waste into small pieces to pass through plumbing.

Recycling

The process of converting waste materials into new products to prevent waste of potentially useful materials, reduce consumption of fresh raw materials, and lower energy usage and pollution.

Marginal Benefit

The additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Marginal External Damages

Additional harm or cost imposed on society or a third party that is not accounted for by the producer or consumer of a good or service.