An Investor Earns $400 in Dividends and $800 in Capital

question 74

Multiple Choice

An investor earns $400 in dividends and $800 in capital gains over a year.If the tax rate on these earnings is 15%, what is the total tax that the investor is liable to pay on these earnings?

• A)$0.
• B)$60.
• C)$120.
• D)$180.

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Definitions:

Marginal Product

The additional output that results from using one more unit of a particular input, holding other inputs constant.

Average Product

The average output produced per unit of a factor of production over a specific period, often calculated for labor or capital.

Input

The resources used in the production process, such as labor, materials, and machinery.

Explicit Costs

These are direct payments made to others in the course of running a business, such as wages, rent, and materials.