The mythical country of Januvia imposes a tax based on the number of titanium coins each taxpayer owns at the end of each year per the following schedule:
?
$$\begin{array} { c c }
\hline \text { Number of titanium coins } & \text { Tax } \
\hline 0 - 200 & \$ 500 + \$ 5 \text { per titanium coin } \
201 - 500 & \$ 1,000 + \$ 6 \text { per titanium coin } \
500 & \$ 4,000 + \$ 7 \text { per titanium coin } \
\hline
\end{array}$$
Marvin, a resident of Januvia, owns 300 titanium coins at the end of the current year.
I.Marvin's titanium coins tax is $2,800.
II.Marvin's marginal tax rate is $6.
III.Marvin's average tax rate is $9.33.
IV.Marvin's average tax rate is $6.

Question

The mythical country of Januvia imposes a tax based on the number of titanium coins each taxpayer owns at the end of each year per the following schedule:
?
$$\begin{array} { c c } 
\hline \text { Number of titanium coins } & \text { Tax } \
\hline 0 - 200 & \$ 500 + \$ 5 \text { per titanium coin } \
201 - 500 & \$ 1,000 + \$ 6 \text { per titanium coin } \
> 500 & \$ 4,000 + \$ 7 \text { per titanium coin } \
\hline
\end{array}$$ 
Marvin, a resident of Januvia, owns 300 titanium coins at the end of the current year.
I.Marvin's titanium coins tax is $2,800.
II.Marvin's marginal tax rate is $6.
III.Marvin's average tax rate is $9.33.
IV.Marvin's average tax rate is $6.

Quizplus · Accepted Answer

Marvin's tax is $1,000 + $6 per titanium coin over 200. So, his tax is $1,000 + $6(300 - 200) = $2,800. So, statement I is correct. His marginal tax rate is $6. So, statement II is correct. His average tax rate is $2,800/300 = $9.33. So, statement III is incorrect. His average tax rate is not $6. So, statement IV is incorrect.

The Mythical Country of Januvia Imposes a Tax Based on the Number