Suppose that the income tax in a certain nation is computed at a flat rate of 5%, but no tax is levied above $50,000 in taxable income. Taxable income, in turn, is calculated as the individual's income minus $10,000 (i.e., everyone gets a $10,000 deduction). For each of the following three individuals/workers, calculate their average tax rate and marginal tax rate. Make sure you write tax rates as percentages and where necessary, round to two decimal places.

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Chapter1: Making Economics Decisions
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Suppose that the income tax in a certain nation is computed at a flat rate of 5%, but no tax is levied above $50,000
in taxable income, Taxable income, in turn, is calculated as the individual's income minus $10,000 (i.e., everyone
gets a $10,000 deduction). For each of the following three individuals/workers, calculate their average tax rate and
marginal tax rate. Make sure you write tax rates as percentages and where necessary, round to two decimal places.
A) A part-time worker with an annual gross income of $9,000: average tax rate is
marginal tax rate is
B) A retail salesperson with annual income of $45,000: average tax rate is
rate is
%.
tax rate is
%.
C) An advertising executive with annual income of $600,000: average tax rate is
%.
% and
% and marginal tax
% and marginal
Transcribed Image Text:Suppose that the income tax in a certain nation is computed at a flat rate of 5%, but no tax is levied above $50,000 in taxable income, Taxable income, in turn, is calculated as the individual's income minus $10,000 (i.e., everyone gets a $10,000 deduction). For each of the following three individuals/workers, calculate their average tax rate and marginal tax rate. Make sure you write tax rates as percentages and where necessary, round to two decimal places. A) A part-time worker with an annual gross income of $9,000: average tax rate is marginal tax rate is B) A retail salesperson with annual income of $45,000: average tax rate is rate is %. tax rate is %. C) An advertising executive with annual income of $600,000: average tax rate is %. % and % and marginal tax % and marginal
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