Refer to Figure 16.5 below. If the marginal cost of underreporting can be written as MC = X 2 +
(A) What is the maximum marginal tax level (t) possible that will ensure tax evasion is zero?
(B) If the Marginal Tax rate is equal to 0.56, how much income will be evaded?
(A) t* < 0.40
(B) Set MB = MC so that X 2 + 0.4 = 0.56, X 2 = 0.16 and X = 0.40
Economics
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When Frankie spends all his money in such a way that the marginal utility per dollar is the same for all final purchases of products he consumes, Frankie has maximized
A) his marginal utility. B) his total utility. C) the number of products he consumes. D) his total expenditure on all products.
Economics
Refer to the given diagram. The economy is dissaving:
A. in the amount CD.
B. at all income levels greater than E.
C. at income level H.
D. at income level E.
Economics