On a Particular Saturday, Tom Had Planned to Paint a Room

question 20

Multiple Choice

On a particular Saturday, Tom had planned to paint a room in his house, but his employer gave him the opportunity to work that day. If Tom works, he must hire a painter for $120. For Tom to have a positive cash flow from working and hiring the painter:

• A)Tom must earn more than $160 if he is in the 25% marginal tax bracket.
• B)Tom must earn at least $160 if he is in the 33% marginal tax bracket.
• C)Tom must earn at least $150 if he is in the 25% marginal tax bracket.
• D)Tom must earn at least $135 if he is in the 15% marginal tax bracket.
• E)None of these.

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Definitions:

Income Elastic

A measure of how the demand for a good or service changes in response to changes in consumers' income.

Price Inelastic

A characteristic of a good or service for which demand does not significantly change with a change in its price.

Price Support

The term used to refer to price floors applied to farm commodities; the minimum price that the government allows farmers to receive for farm commodities like wheat or corn.

Farm Incomes

Farm incomes encompass the earnings and revenue generated from agricultural activities, reflecting the financial health and viability of farming operations.