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Unformatted text preview: ECONOMICS 100A Professor Dan Acland 09/09/10 Lecture 5 ASUC Lecture Notes Online is the only authorized note-taking service at UC Berkeley. Do not share, copy, or illegally distribute (electronically or otherwise) these notes. Our student-run program depends on your individual subscription for its continued existence. These notes are copyrighted by the University of California and are for your personal use only. D O N O T C O P Y Sharing or copying these notes is illegal and could end note taking for this course. ICLICKER QUIZ (5 minutes for quiz) ANNOUNCEMENTS The first thing I want to let you know is that because today is a religious holiday, a number of people needed to miss the lecture for that purpose. So, this lecture is being videoed today. I also want to let you know that I have a very good friend of mine who is actually doing the video because it turns out that our department can’t actually afford to do the webcasts for religious holidays. I didn’t realize how high the fee was for doing it, so I’m going to have to redo the syllabus and renege on that promise. I’m really sorry about that. I’ll send out an email about that, but because I have not announced that yet, this lecture will be recorded. Slide : Announcements 1) When, where, and how to turn in problem sets. - Problem sets must be turned in as you enter the lecture hall on Tuesday (the next lecture) to a GSI (I am not a GSI). - No problem sets will be accepted after the end of the quiz. - There will be no exceptions . Please don’t ask. (Unless you have a University approved excuse with written documentation.) - If you know in advance that you won’t be able to turn your problem set in at the beginning of lecture on Tuesday, you may deliver it to my mailbox in 508-1 Evans, from 9am-4pm M-F BEFORE the due date. 2) We’re close to the capacity of this room, so please don’t save seats after the beginning of the quiz. 3) Clarification of exercise 2.17: Tax deduction versus tax credit. (The first problem in the problem set) If you have some income and the government gives you an opportunity for a tax deduction, it means that there is a portion of your income that you don’t have to pay taxes on. If the government gives you a tax credit it means that after your taxes are computed, and there is a chunk of that tax that you don’t have to pay. - A deduction is a portion of your income that you do not have to pay taxes on. - A credit is a portion of your actual taxes that you do not have to pay. - If your tax rate is 10%, a $100 deduction reduces your tax bill by $10, whereas a $100 credit reduces your tax bill by the full $100. LECTURE Slide : Bill Gates’ preferences revisited....
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