Question

The following table shows income tax rates in Econoland

Annual Income Tax Rate

Up to $80,000 10%

From $80,001 to $120,000    20%

Over $120,000. 30%

This is an example of ——- income tax

Brain, a resident of Econoland, currently works 20 hours a week and earns an annual income of $80,000. After paying income taxes, Brian receives _____ per year

If Brian works an additional 10 hours a week (30 hours a week total), his annual income will be $120,000. After paying income taxes Brian will Recieve ____ per year. In other words, by working an additional 10 hours per week, Brian will Recieve an additional ___

If a Brian works 10 more hours in a week (40 hours a week total) his annual income will further increase to $160,000. After paying income taxes, Brain will Recieve ____ per year. In other words, by working 10 more hours per week, Brain will Recieve ____ more than what he would Recieve if he works only 30 hours a week

As Brian works more, the additional amount he receives from working 10 more hours ____, which means his cost of leisure ____

Answer 1

Answer:

From given data,

The following table shows income tax rates in Econoland

Annual Income Tax Rate

Up to $80,000 10%

From $80,001 to $120,000    20%

Over $120,000. 30%

This is an example of ——- income tax

Progressive

Reason: as the tax rate increase with income.

Brain, a resident of Econoland, currently works 20 hours a week and earns an annual income of $80,000. After paying income taxes, Brian receives _____ per year

$80,000*(1-0.10) = $72,000

Reason: 10% tax is applicable upto $80,000.

If Brian works an additional 10 hours a week (30 hours a week total), his annual income will be $120,000. After paying income taxes Brian will Recieve ____ per year. In other words, by working an additional 10 hours per week, Brian will Recieve an additional ___

$72,000+ $40,000*(1-0.2) = 104,000

Thus, additional 104000-72000 = 32,000.

If a Brian works 10 more hours in a week (40 hours a week total) his annual income will further increase to $160,000. After paying income taxes, Brain will Recieve ____ per year. In other words, by working 10 more hours per week, Brain will Recieve ____ more than what he would Recieve if he works only 30 hours a week

104,000 + 40,000*(1-0.3) = 132,000

Thus, additional 28,000

As Brian works more, the additional amount he receives from working 10 more hours ____, which means his cost of leisure ____

Decreases, decreases

Reason: wage rate is the opportunity cost of leisure.

***NOTE: Kindly upvote the answer if it is useful helpful to you......