4. Consider a corporate tax system that uses the declining-balance method for determining depreciation for tax purposes. Assume that the applicable rate is 60 percent and the tax life of the asset is 3 years. If a corporation purchases a depreciable asset for $40,000, what depreciation deduction is allowed in each year of this asset's use?

In Industry A, the 2020 wage is (Click to select)the same ashigher thanlower than the 2019 wage.

In Industry B, the before-tax wage in 2020 is (Click to select)the same ashigher thanlower than the 2019 wage.

In Industry B, the after-tax wage in 2020 is (Click to select)the same ashigher thanlower than the 2019 wage

5.David saves $3000 of his Year 1 income to spend in Year 2. The interest rate is 12 percent, the tax rate that applies to interest income is 20 percent, and the sales tax rate is 5 percent. If David spends all available funds in Year 2, how much will he pay in taxes on his interest income and how much will he pay in sales taxes?

Please fill in the blanks below with your numeric answers. Do not include the dollar sign. If necessary, please round to the nearest dollar.

David will pay $ in taxes on his interest income.

David will pay $ in sales taxes

6Tax wedge is the difference between tax-induced price paid by consumers and the tax amount.

True

False

7.A project yields an annual benefit of $140 per year, starting immediately and continuing forever. This project costs $200 now, $200 one year from now, and $200 two years from now. The interest rate is 10 percent and there is no inflation. What is the present value net benefit of this project?

[NOTE: Please enter your numeric answer in the space below, rounded to the nearest dollar. Do not put the dollar sign.]

8.Consider the impact of a tax within the context of the life-cycle model. A tax on interest income shifts ____________ downward.

A.the intertemporal budget constraint

b.the indifference curves

c.both the intertemporal budget constraint and the indifference curves

d.neither the intertemporal budget constraint nor the indifference curves

9.Suppose Mrs. Davina's home has an assessed value of $350,000. She originally paid $290,000 to purchase the home and holds a mortgage of $220,000 on the home. The residental property tax rate in Mrs. Davina's municipality is 1 percent. What does Mrs. Davina owe in property taxes annually?

$2,200

$1,300

$3,500

$700

$2,900

10.Consider a country that taxes its citizens individually according to the following rate schedule:

Taxable Income	Marginal Tax Rate
First $30,000	15%
Over $30,000 up to $60,000	20%
Over $60,000	25%

Suppose that the steps to compute tax liability are the same in this tax system as they are in Canada. Compute the tax liability for a taxpayer with $95,000 in total income, of which $8,000 qualifies for a deduction and $2,000 qualifies for a credit.

[NOTE: Fill in the blank below with your numeric answer. If necessary, please round to the nearest whole number. Do not include the dollar sign or comma.]

This taxpayer's total tax liability will be $.