Problem 20-3 (Algo) For tax purposes, "gross income" is all the money a person receives in a given year from any source. But income taxes are levied on "taxable income" rather than gross income. The difference between the two is the result of many exemptions and deductions. To see how they work, suppose you made $60,000 last year in wages, $10,000 from investments, and were given $5,000 as a gift by your grandmother. Also assume that you are a single parent with one small child living with you. Instructions: Enter your answers as whole numbers. a. What is your gross income? b. Gifts of up to $12,000 per year from any person are not counted as taxable income. Also, the "personal exemption" allows you to reduce your taxable income by $3,650 for each member of your household. Given these exemptions, what is your taxable income? c. Next, assume you paid $700 in interest on your student loans last year, put $2,000 into a health savings account (HSA), and deposited $4,000 into an individual retirement account (IRA). These expenditures are all tax exempt, meaning that any money spent on them reduces taxable income dollar-for-dollar. Knowing that fact, what is now your taxable income? d. Next, you can either take the so-called standard deduction or apply for itemized deductions (which involve a lot of tedious paperwork). You opt for the standard deduction that allows you as head of your household to exempt another $8,500 from your taxable income. Taking that into account, what is your taxable income? e. Apply the tax rates shown in the table below to your taxable income. Federal Personal Income Tax Rates, 2013" (1) (2) (3) (4) Average Tax Rate Total Taxable Marginal Tax Rate, Total Tax on Income Highest Income in on Highest Income % Bracket in Bracket, % (3) + (1) $1-$17,850 10 $ 1,785 10 $17,851-$72,500 15 9,983 14 $72,501-$146,400 25 28,45 19 $146,401-$223.050 28 49,920 22 $223,051-$398,350 33 107,769 27 $398,351-$450,000 35 125,847 28 $450,001 and above 39.6Exercise #7 - Price discrimination with linear costs Consider a monopoly facing inverse demand function p(q) = 100 -q, and total cost TC(q) = 4q. a) No price discrimination. Assume that price discrimination is illegal. What are the monopolist's optimal output, price and profits? b) First-degree price discrimination. For the remainder of the exercise, consider now that the monopolist can practice price discrimination. In addition, assume that this firm has enough information to practice first-degree (perfect) price discrimination. What are the monopolist's optimal output, price and profits? c) Two block pricing. Assume that the monopolist offers price discounts (i.e., two blocks of units, each sold at a different price per unit). What are the monopolist's optimal output, price and profits? d) Comparison. Compare the monopolist's profit under each of the above pricing strategies, and show that the profits in part (b) are the highest, followed by those in (c), followed by those in part (c), and by those in part (a).Problem #1: For the project depicted below, Activity 2 Activity 4 T-9 FF T-5 EF= LS IF works LF- Activity 1 Activity 6 Start 1=6 ES= EF T=2 ES EF End LF who LS LF Activity 3 Activity 5 T=0 T-J IS= LF= 152 LF= (a) Construct a Gantt chart. How long do you expect the project to take to complete? (b) Compute the ES, EF. LS, and LF times for the network. (c) Explain how the ES for Activity 3 is obtained.Choose the wrong statement regarding Figure 9.1 of Stock and Watson (the left graph on page 19 of Lecture Slides 7) a. The graph shows 220 data points (please do not count on the graph!). b. The scatter diagram shows some nonlinearity in the relationship between TestScore and District Income. . C. The following R-code estimates the linear regression: > Im_robust(score4 ~ income, se_type = "HC1") O d. The following R-code estimates the cubic regression: > Im_robust(score4 ~ income + income^2 + income^3, se_type = "HC1") O e. The following R-code estimates the linear-log regression: > Im_robust(score4 ~ log(income), se_type = "HC1")