EP ECONOMICS,AP EDITION-CONNECT ACCESS
20th Edition
ISBN: 9780021403455
Author: McConnell
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 16, Problem 3DQ
To determine
Relation between Henry George’s proposal for a single tax on land and supply elasticity of land.
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Suppose George made $20,000 last year and that he lives in the country of Harmony. The way Harmony levies income taxes, all
citizens must pay 10 percent in taxes on their first $10,000 in earnings and then 50 percent in taxes on anything else they might earn.
Given that George earned $20,000 last year, his marginal tax rate on the last dollar he earns will be
rate for his entire income will be
and his average tax
O 10 percent; 50 percent
O 50 percent; less than 50 percent
O 10 percent; less than 50 percent
O 50 percent; 50 percent
If the tax code exempts the first $20,000 of income from taxation and then taxes 25 percent of all income above that level, then a person who earns percent and a marginal tax rate of $50,000 has an average tax rate of percent.
O 15, 25 O 25, 15 O 25, 30 O 30, 25
Consider that the market demand for a textbook is given by P = 100 - 20 land the market supply is given by P = 10 + Q. Suppose a price
ceiling of $20 is imposed. What is the deadweight loss?
O 300
O 450
O 600
O 150
Chapter 16 Solutions
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