Suppose a Poverty Program Has a Basic Benefit of $5,000

question 89

Multiple Choice

Suppose a poverty program has a basic benefit of $5,000, zero deductions, and a marginal tax rate of 0.50.The breakeven level of income is

• A) $2,500.
• B) $25,000.
• C) $15,000.
• D) $10,000.

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Definitions:

Accounting Profit

The difference between total revenue and explicit costs.

Economic Profit

The difference between total revenue and total costs, including explicit and implicit costs.

Implicit Costs

The opportunity costs of using resources that a firm already owns to produce goods or services instead of earning money from these resources elsewhere.

Accounting Costs

Expenses recognized in a company's financial statements or accounts, representing outlays related to its operations and maintenance.