A state imposes a retail sales tax on consumer purchases of many items. The table below shows information related to the Smith and Jones families, who are generally representative of similar consumers in the state. Answer the following questions in the Word document, and include a table in the Excel file.

Smith Family: Jones Family:

Income: $35,000 $101,000

Household: 5 3

a. Assume that the tax rate is 5.5%. Under the current law, the Smith family spends $26,000 annually on purchases that are subject to sales tax, while the Jones family spends $62,800. What is the amount of sales tax that will be paid by each family? b. What is the total amount of tax revenue the state will receive from these two families? c. What is the effective tax rate paid by each family? (Note: use two decimal places when calculating the effective rate).