Consider the economy of Citronia, where citizens consume only oranges. Assume that oranges are priced at $1 each. The government has devised thefollowing tax plans:Plan A• Consumption up to 1,000 oranges is taxed at 5%.• Consumption higher than 1,000 oranges is taxed at 50%..Use the Plan A and Plan B tax schemes to complete the following table by deriving the marginal and average tax rates under each tax plan at theconsumption levels of 500 oranges, 1,800 oranges, and 3,000 oranges, respectively.Consumption Level(Quantity of oranges)88°FSunny5001,8003,000F2@2Marginal Tax Rate(Percent)Complete the following table by indicating whether each plan is a progressive tax system, a proportional tax system, or a regressive tax system.F370Q+Plan A#3F4Average Tax Rate(Percent)Plan B• Consumption up to 2,000 oranges is taxed at 45%.• Consumption higher than 2,000 oranges is taxed at 15%.$4F5Plan BMarginal Tax Rate(Percent)%5F6F7Average Tax Rate(Percent)6F8&7(CF9O!!!!!★8F10-0.(9F11F1202FnLock12:07 PM7/1/2022InsertPrt ScA-ZABack 88°FSunny• Consumption up to 1,000 oranges is taxed at 5%.• Consumption higher than 1,000 oranges is taxed at 50%.Use the Plan A and Plan B tax schemes to complete the following table by deriving the marginal and average tax rates under each tax plan at theconsumption levels of 500 oranges, 1,800 oranges, and 3,000 oranges, respectively.Consumption Level(Quantity of oranges)Plan A5001,8003,000Plan BOMarginal Tax Rate(Percent)Plan A3F4Complete the following table by indicating whether each plan is a progressive tax system, a proportional tax system, or a regressive tax system.Progressive Proportional RegressiveOOOAverage Tax Rate(Percent)• Consumption up to 2,000 oranges is taxed at 45%.• Consumption higher than 2,000 oranges is taxed at 15%.$4F5Marginal Tax Rate(Percent)Q%5Plan BF6F7a>Average Tax Rate(Percent)6F8&7&F9O*008F10-0.(9F11F1202FnLock

The measure that depicts the charges that are levied by government on goods and services being the…

Consider the economy of Citronia, where citizens consume only oranges. Assume that oranges are priced at $1 each. The government has devised the following tax plans: Plan A • Consumption up to 1,000 oranges is taxed at 5%. • Consumption higher than 1,000 oranges is taxed at 50%. Use the Plan A and Plan B tax schemes to complete the following table by deriving the marginal and average tax rates under each tax plan at the consumption levels of 500 oranges, 1,800 oranges, and 3,000 oranges, respectively. Consumption Level (Quantity of oranges) 500 1,800 3,000 Plan A Plan B Consumption up to 2,000 oranges is taxed at 45%. • Consumption higher than 2,000 oranges is taxed at 15%. Marginal Tax Rate (Percent) Average Tax Rate (Percent) Plan B Marginal Tax Rate (Percent) Average Tax Rate (Percent) Complete the following table by indicating whether each plan is a progressive tax system, a proportional tax system, or a regressive tax system.

Consider the economy of Citronia, where citizens consume only oranges. Assume that oranges are priced at $1 each. The government has devised the following tax plans: Plan A • Consumption up to 1,000 oranges is taxed at 5%. • Consumption higher than 1,000 oranges is taxed at 50%. Use the Plan A and Plan B tax schemes to complete the following table by deriving the marginal and average tax rates under each tax plan at the consumption levels of 500 oranges, 1,800 oranges, and 3,000 oranges, respectively. Consumption Level (Quantity of oranges) 500 1,800 3,000 Plan A Plan B Consumption up to 2,000 oranges is taxed at 45%. • Consumption higher than 2,000 oranges is taxed at 15%. Marginal Tax Rate (Percent) Average Tax Rate (Percent) Plan B Marginal Tax Rate (Percent) Average Tax Rate (Percent) Complete the following table by indicating whether each plan is a progressive tax system, a proportional tax system, or a regressive tax system.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter17: Taxation And Resource Allocation

Section: Chapter Questions

Problem 2DQ

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If the government gives a $300 tax cut to everyone inthecountry,explainthemechanismbywhichthiswill cause interest rates to rise.
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