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public_ps3_sp09

# public_ps3_sp09 - NAME PAM 204 Problem Set#3 Complete the...

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NAME_________________________ PAM 204- Problem Set #3 Complete the problem set on these four sheets of paper. Circle your answers to the multiple choice questions. Note that there are seven problems. PS #3 is out of 10 points. #1) Consider an EITC program in which the maximum credit is \$3000. An individual who has earned income between \$7000 and \$11,000 receives the maximum credit (ie- someone who has earned income of \$10,000 will have total income of \$13,000 because of the tax credit). An individual who has earned income of \$15,000 has total income of \$16,000. What is the implicit tax rate that the individual who has earned income of \$15,000 faces? Round your answer to two decimal places if necessary. (1 point) #2) Consider an EITC program in which the maximum credit is \$4000. An individual who has earned income between \$8000 and \$12,000 receives the maximum credit (ie- someone who has earned income of \$10,000 will have total income of \$14,000 because of the tax credit). An individual who has earned income of \$20,000 has total income of \$21,000. What is the implicit tax rate that the individual who has earned income of \$20,000 faces? Round your answer to two decimal places if necessary. (1 point)

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