In Figure 30

question 100

Multiple Choice

In Figure 30.2, a minimum wage of $20 will result in a

• A) Shortage of 160 workers.
• B) Shortage of 180 hours.
• C) Surplus of 32 workers.
• D) Surplus of 20 workers.

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of income is taxed, reflecting the percentage of additional income that is paid in taxes.

Average Tax Rate

The ratio of the total amount of taxes paid to the total income, showing the share of income that goes to taxes.

Income Tax System

The framework by which governments collect a percentage of income from individuals and businesses as tax, which varies according to earnings levels.

Marginal Tax Rate

The rate at which the last dollar of income is taxed, representing the percentage of additional income that is paid in tax.