-Refer to Figure 34.4.The implied marginal tax rate in this example is

Name: -Refer to Figure 34.4.The implied marginal tax rate in this example is
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Question

Quizplus · Accepted Answer

The implied marginal tax rate is the slope of the budget constraint. In this case, the slope is negative but not infinite (i.e. not vertical), which means there is some implicit taxation at the margin. Therefore, the answer is between 0 and 100 percent.