# ECON1001 Study Guide - Quiz Guide: Tax Rate, Regressive Tax, Progressive Tax

27 views7 pages

Which of these is the definition of a marginal tax rate?

Select one:

a. The tax rate you pay on the last dollar you earn

b. The portion of your income you pay in tax divided by our total income

c. The tax rate you pay at each income bracket

d. The tax rate you pay on the next dollar you earn

Feedback

Your answer is correct.

Marginal tax is paid on the next dollar you earn. It typically increases in brackets, but it is not the

brackets themselves. Average tax is the portion of your income you pay in tax divided by your

total income.

The correct answer is: The tax rate you pay on the next dollar you earn

Question 2

Correct

Mark 1.00 out of 1.00

Flag question

Question text

Which of these is the definition of an average tax rate?

Select one:

a. The tax rate you pay on the next dollar you earn

b. The tax rate you pay on the last dollar you earn

c.

The portion of your income you pay in tax divided by our total income

d. The tax rate you pay at each income bracket

Feedback

Your answer is correct.

Marginal tax is paid on the next dollar you earn. It typically increases in brackets, but it is not the

brackets themselves. Average tax is the portion of your income you pay in tax divided by your

total income.

The correct answer is:

The portion of your income you pay in tax divided by our total income

Question 3

Correct

Mark 1.00 out of 1.00

Flag question

Question text

Given the following tax schedule, what is the

marginal tax rate paid

by someone earning $120

000?

Taxable Income

Tax on this Income

$0 - $18200

Nil

$18201 - $37000

19c for each $1 over $18200

$37001 - $90000

$3572 + 32.5c for every $1 over $37000

$90001 - $180000

$3572 + $17225 + 37c for every $1 over $90000

$180001+

$3572 + 17225 + 33300 plus 45c for every $1 over $180000

Select one:

a. 37 cents on the dollar

b.

29.5 cents on the dollar

c. 32.5 cents on the dollar

d.

19c for each $1 over $18200, 32.5c for every $1 over $37000, and 37c for every $1 over $90000

Feedback

Your answer is correct.

The marginal tax rate is paid on the next dollar you earn. Here that would 120001, which falls in

the 4th bracket and would thus be taxed at 37c/dollar.

The correct answer is: 37 cents on the dollar

Question 4

Correct

Mark 1.00 out of 1.00

Flag question

Question text

Given the following tax schedule, what is the

total tax paid

by someone earning $120 000?

Taxable Income

Tax on this Income

$0 - $18200

Nil

$18201 - $37000

19c for each $1 over $18200

$37001 - $90000

$3572 + 32.5c for every $1 over $37000

$90001 - $180000

$3572 + 17225 + 37c for every $1 over $90000

$180001+

$3572 + 17225 + 33300 + 45c for every $1 over $180000