Which of the following changes in personal income tax would lead to the smallest increase inconsumption?O a.O b. a $15 000 decrease in taxes, if MPC equals0.6O c.a $30 000 decrease in taxes, if MPC equals0.25Oe.a $20 000 decrease in taxes, if MPC equals0.5O d. a $12 000 decrease in taxes, if MPC equals0.75a $10 000 decrease in taxes, if MPC equals0.2

The act of using products and services to fulfill human desires and needs is referred to as…

Which of the following changes in personal income tax would lead to the smallest increase consumption? O a. a $30 000 decrease in taxes, if MPC equals 0.25 O b. a $15 000 decrease in taxes, if MPC equals 0.6 O c. a $20 000 decrease in taxes, if MPC equals 0.5 O d. a $12 000 decrease in taxes, if MPC equals 0.75 O e. a $10 000 decrease in taxes, if MPC equals 02

Which of the following changes in personal income tax would lead to the smallest increase consumption? O a. a $30 000 decrease in taxes, if MPC equals 0.25 O b. a $15 000 decrease in taxes, if MPC equals 0.6 O c. a $20 000 decrease in taxes, if MPC equals 0.5 O d. a $12 000 decrease in taxes, if MPC equals 0.75 O e. a $10 000 decrease in taxes, if MPC equals 02

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that a country has 20 million households. Ten million are poor households that each have labor market earnings of $20,000 per year and 10 million are rich households that each have labor market earnings of $80,000 per year. If the government enacted a marginal tax of 10 percent on all labor market earnings above $20,000 and transferred this money to households earning $20,000 or less, would the incomes of the poor rise by $8,000 per year? O A. No. Workers in rich and poor households would work less because of the marginal tax. O B. Yes. 10% of $80,000 is $8,000; therefore, $8,000 from each rich household would be transferred to each poor household. O C. There is not enough information to determine household behavior in this case. O D. No. Only workers in rich households would work less because of the marginal tax.
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1
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