Phil and Audrey, Husband and Wife, Both Are Employed by Laurel

question 113

Essay

Phil and Audrey, husband and wife, both are employed by Laurel Corporation. Phil earns $125,000 in salary in 2017, and Audrey earns $70,000. How much FICA tax must they pay for 2017?

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Definitions:

Marginal Benefit

The boost in satisfaction or utility received from consuming one more unit of a good or service.

Efficiency Loss

The reduction in economic efficiency due to factors like market distortions, resulting in resources not being allocated optimally.

Deadweight Loss

refers to the loss of economic efficiency that can occur when the equilibrium for a good or service is not achieved, leading to a reduction in total societal welfare.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers.