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December 10th, 2007, 12:40 PM  #1 
Newbie Joined: Oct 2007 Posts: 19 Thanks: 0  Challenging econ question
Mr.Smith has an income of $75 000 a year. At this income his federal and provincial tax rates total to 43%. His consumption at this disposable income is $36 750. Mr.Jones is about to retire. He has calculated that his yearly income will decrease by 40%. At this new income his new total tax rate will be 31%. Assume Mr.Smith's new MPC will equal 0.72. a)calculate his new consumption level per year. b)what were his initial APS? c) What are his final APS? 
December 10th, 2007, 03:28 PM  #2 
Global Moderator Joined: Nov 2006 From: UTC 5 Posts: 16,046 Thanks: 938 Math Focus: Number theory, computational mathematics, combinatorics, FOM, symbolic logic, TCS, algorithms 
Well, what do you have so far? Also, what definitions do you use for your terms (APS in particular).


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