Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507041
Author: Colander, David
Publisher: MCGRAW-HILL HIGHER EDUCATION
Question
Book Icon
Chapter 18, Problem 1QAP

(a)

To determine

The transfer cost of upper quintiles.

(b)

To determine

The discretionary income that the top 20 percent should invest to change the situation.

(c)

To determine

The discretionary income that the bottom 20 percent should have to prevent the change.

Blurred answer
Students have asked these similar questions
Suppose in Fiscalville there is a 5 percent tax on the first $10,000 of income, but there is a 15 percent tax on earnings between $10,000 and $20,000 and a 25 percent tax on income between $20,000 and $30,000. Any income above $30,000 is taxed at 35 percent. Instructions: Round your answers to the nearest whole number. a. If your income is $70,000, how much will you pay in taxes? b. Determine your marginal tax rate. percent c. Determine your average tax rate. percent
SC Many economists believe that a more effective way to supplement the income of the poor is through a negative income tax. Under this scheme, everyone reports his or her income to the government; individuals and families earning a higher income will pay a tax based on that income, while low-income individuals and families receive a subsidy, or negative tax. Assume that the only qualification required to receive a tax credit is low income. Suppose the government uses the following equation to compute a family's tax liability: Taxes Owed = (1/4 of Income) For each of the incomes listed in the following table, determine the tax liability for a family with that income level. (Note: If a family receives a subsidy because its income is too low, be sure to indicate the tax liability as negative.) Income Tax Liability (Dollars per year) (Dollars per year) 0 20,000 40,000 60,000 77°F Mostly sunny (1/4 of Income) - $10,000 F1 F2 0- F3 Q+ F4 F5 DA COL F6 i F7 1 C J F8 C F9 SAC F10 FO F11 F12 2…
The following questions list 10 cases of two distributions of income, in each of states "A" and "B." (You can think of A and B as with and without some policy change.) In each case there are three people only (in last three cases four people), and their incomes are the numbers given. So in the first question, the first person in state A has an income of $1 (think of this as $1 per hour, or day), while the second person has $2, and the third has $3. In state B the same three people have incomes of $2, $4 and $6 respectively. There are no other differences between states A and B, and no other differences between people besides their incomes as indicated. Your task is simple and it should not take more than a few minutes. Tell me which state (if either) in each question has higher "inequality." You should assume that everything else is identical between the two states; all that differs is the incomes of the people. This is entirely your judgment, given how you interpret the concept of…
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Economics Today and Tomorrow, Student Edition
Economics
ISBN:9780078747663
Author:McGraw-Hill
Publisher:Glencoe/McGraw-Hill School Pub Co
Text book image
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Text book image
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Text book image
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning
Text book image
Economics (MindTap Course List)
Economics
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Cengage Learning
Text book image
Microeconomics
Economics
ISBN:9781337617406
Author:Roger A. Arnold
Publisher:Cengage Learning