Other Economics Answers

Jill and Gary are married and file a joint return. They expect to have $180,000 of taxable income in the next year and are considering whether to purchase a personal residence that would provide additional tax deductions of $36,000 for mortgage interest and real estate taxes.

What is their marginal tax rate for purposes of making this​ decision?

What is the tax savings if the residence is​ acquired?

Married, Filing Joint and Surviving Spouse

If taxable income is: The tax is:

Not over $19,900 10% of taxable income.

Over $19,900 but not over $81,050 $1,990.00 + 12% of the excess over $19,900.

Over $81,050 but not over $172,750 $9,328.00 + 22% of the excess over $81,050.

Over $172,750 but not over $329,850 $29,502.00 + 24% of the excess over $172,750.

Over $329,850 but not over $418,850 $67,206.00 + 32% of the excess over $329,850.

QUESTION 1

The market demand and supply equations for a product are: QD = 25 - 3P and QS = 10 + 2P, where Q is quantity and P is price.

(a) What are the equilibrium price and quantity for this product?

(b) Formulate the inverse demand function.

(c) If income rises, leading to new demand of QD = 40 - 3P, find new P* and Q*

(d) Now, suppose the government enacts legislation that imposes a price ceiling equivalent to

the original equilibrium price. What is the result of this legislation?

(e) Determine the quantity demanded, the quantity supplied, and the magnitude of the

surplus if a price floor of $9 is imposed in this market.

(f) Determine the quantity demanded, the quantity supplied, and the magnitude of the

shortage if a price ceiling of $1.5 is imposed in this market. Also, determine the full economic price paid by consumers.