Refer to the information provided in Table 19.4 below to answer the question(s) that follow.
Table 19.4
$$\begin{array} { | c | c | }
\hline \text { Total Income } & \text { Total Taxes } \
\hline \$ 10,000 & \$ 1,000 \
\hline 20,000 & 2,400 \
\hline 30,000 & 4,500 \
\hline 40,000 & 8,000 \
\hline
\end{array}$$
-Related to the Economics in Practice on page 393: Refer to Table 19.4. If income increases from $20,000 to $30,000, the marginal tax rate is

Question

Refer to the information provided in Table 19.4 below to answer the question(s) that follow.
Table 19.4
 $$\begin{array} { | c | c | } 
\hline \text { Total Income } & \text { Total Taxes } \
\hline \$ 10,000 & \$ 1,000 \
\hline 20,000 & 2,400 \
\hline 30,000 & 4,500 \
\hline 40,000 & 8,000 \
\hline
\end{array}$$
-Related to the Economics in Practice on page 393: Refer to Table 19.4. If income increases from $20,000 to $30,000, the marginal tax rate is

Quizplus · Accepted Answer

The marginal tax rate is calculated by the increase in taxes divided by the increase in income. From $20,000 to $30,000, taxes increase from $2,400 to $4,500, which is an increase of $2,100. The increase in income is $10,000. Therefore, the marginal tax rate is $2,100 / $10,000 = 0.21 or 21%.

Refer to the Information Provided in Table 19 -Related to the Economics in Practice on Page 393: Refer