Harun earned $50,000 in salary and paid $10,000 in federal taxes. If he receives $2,000 in interest payments from municipal bonds,
A. his marginal tax rate will be about 19.2 percent.
B. his average tax rate will fall.
C. his marginal tax rate will remain constant.
D. his marginal tax rate will be 20 percent.
Answer: B
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By definition, disposable income is equal to
A) consumption minus saving. B) consumption plus saving. C) consumption plus investment. D) investment plus saving.
Economists Gary Becker and Kevin Murphy are associated with which of the following?
A) They discovered that price changes have both income and substitution effects. B) They have argued that social factors are not important in explaining the choices consumers make. C) Consumers appear to receive utility from consuming goods they believe are popular. D) They discovered the first example of a Giffen good.