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Unformatted text preview: e = d. y = 4 x .5 e. 2 3 3 log( ) 4 ( ) 2 x x y f x x + + = = (Also, what must the domain of f(x) be in order that f(x) be defined?) 4. Taxes are assigned by the formula: T = 50+.001I 2 , where I is income and T are taxes. a. Calculate taxes paid at I=$0, $100, $1000. b. At these same income levels, calculate the marginal tax rate (dT/dI) and the average tax rate (T/I) and distinguish between the two. c. Graph the tax (T) and aftertax income (IT) against income I (on the horizontal axis). d. What income, I*, maximizes aftertax income (IT)? Interpret the first order conditions (equation giving the optimal solution) in terms of marginal benefit and marginal cost to an earner of another dollar of income, I?...
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 Winter '08
 Showalter,M
 Economics

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