-Refer to Figure 16.5.If the marginal cost of underreporting can be written as MC = X² + 0.4.
(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?

Question

-Refer to Figure 16.5.If the marginal cost of underreporting can be written as MC = X<sup>2</sup> + 0.4. (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?

Quizplus · Accepted Answer

The Answer of -Refer to Figure 16.5.If the marginal cost of underreporting can be written as MC = X² + 0.4. (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?