The city of Joslyn has three sources of revenue: borrowing, proprietary income from running the local electric power utility, and taxes. If it received $10 million from running the electric
power utility and borrowed $40 million, how much did it collect in taxes if total revenue was $14?
a. $140 million.
b. $110 million.
c. $100 million.
2. Suppose George made $20,000 last year and that he lives in the country of Harmony. The
way Harmony levies income taxes, each citizen must pay 10% in taxes on their first
$10,000 in earnings and then 50% in taxes on anything else they might earn. So given
that George earned $20,000 last year, his marginal tax rate on the last dollar he earns will be
__________ % and his average tax rate for his entire income will be
a. 50 %; 50 %
b. 50 %; less than 50 %
c. 10 %; 50 %
d. 10 %; less than 50 %
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