1 Assume that Steve is a single parent who is in poverty. He receives food stamps and Medicaid. For every $100 that he earns, Steveloses $35 of his food stamp benefits and $20 in his Medicaid benefits. Also, Steve's income is taxed at a rate of 10 percent. Then,Steve's effective marginal tax rate is10%O 35%O 55%O 65%Economizing low income people who receive income assistance from the government, often may not have much of an incentive towork because:O they face very high implicit marginal tax ratesO they are usually not physically able to work.O they have no desire for additional money.O the government forces them to stay at home and take care of their children.

Assume that Steve is a single parent who is in poverty. He receives food stamps and Medicaid. For every $100 that he earns, Steve loses $35 of his food stamp benefits and $20 in his Medicaid benefits. Also, Steve's income is taxed at a rate of 10 percent. Then, Steve's effective marginal tax rate is O 10% O 35% O 55% O 65%

Assume that Steve is a single parent who is in poverty. He receives food stamps and Medicaid. For every $100 that he earns, Steve loses $35 of his food stamp benefits and $20 in his Medicaid benefits. Also, Steve's income is taxed at a rate of 10 percent. Then, Steve's effective marginal tax rate is O 10% O 35% O 55% O 65%

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.2P

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