Post Test 3-10

If Mario were single and his 2023 taxable income was $10,200, how much would he pay in taxes each year?

$1,020.00 All 10,200 in taxable income would be taxed at 10 percent: $10,200 x 10% = $1,020.00.

Rashi is thinking of starting a bookstore that would require her to invest $100,000 for inventory (books), furniture and other such items. Currently, she has her money invested in stocks, which she expects to return about 10 percent per year. She feels that the investment in her own bookstore would be no more risky than her current investment in stocks. What would the opportunity cost be to Rashi for the money she invests in the bookstore?

$10,000

Janie spends 10 hours per week making flower arrangements. Yesterday she was offered an after-school job by the pet store in the mall, which she often visits to look at the animals. If she took this job working ten hours a week, she could make $2,500 per year. She has $500 invested in her flowers, and she could have that money earning interest at one percent per year in a savings account. What is Janie's total opportunity cost of staying in business for herself this year?

$2,505

Rob quit a job working 20 hours per week at a Subway sandwich shop to make sandwiches in his college dorm room that he sells to hungry students. If he had been paid $9 per hour at Subway and now works the same 20 hours per week but sells his sandwiches for $300 per week and pays only $100 per week for the supplies, how much economic profit does he make?

$20 per week

Reuben would like to buy a car that costs $25,000 today when he graduates from college in 5 years. If the rate of inflation is expected to be 3% per year over the next 5 years, how much would Reuben expect to pay for a similar car in today's dollars?

$25,000

Philip wants to donate $156 to United Way, but he wants to give it over the coming year. If he signs up to have a regular amount withheld from his paycheck each week and given to United Way, how much will be taken from his pay for that purpose every week?

$3

If Mario worked for himself and called his company "Mario's Construction Company" and made $20,750 per year, how much would he pay per year in total Social Security and Medicare tax?

$3,174.75 Since he would be self-employed, he must pay both the employee and employer parts which comes to 15.3 percent of his earnings. This equals to 15.3 percent of $20,750 or $3,174.75.

Johnstown Baseball Hats had a very profitable year. The company decided to share some of its profits with the people who own shares of its stock-the shareholders. The money Johnstown Baseball Hats sent to the shareholders is called:

. A dividend payment

Why does Zaida's income line drop so dramatically when she reaches the age of 30?

. Either she or her spouse will stop working to be with the children.

Which of the following is not true of the Echo or empty-nest stage when children are grown and no longer dependent on parents and/or caregivers for support?

B. It begins when a child graduates from high school.

Raymond shares an apartment with a roommate, and they split the rent of $800 per month. He drives his car 10 miles each way to cut a lawn on Saturday for which he is paid $35. He also lets his roommate use his computer 2 hours a day for $30 a week. Which of the following is rent that Raymond receives?

. Money he gets for letting his roommate use his computer.

What is true about retirement savings withheld from employee paychecks?

. Workers don't have to pay taxes on it until they make account withdrawals.

Wendy, who is single, worked her way through college earning an annual taxable income of $12,000 in 2023. Her first job after graduation will give her a taxable income of $35,000 per year. Using the tax table, what is her marginal tax bracket in 2023 while she is still in school and what will it be when she graduates?

12 percent now, 12 percent when she graduates.

Zaida quits her job as an accountant where she earns $65,000 per year to go back to school for two years to get an MBA degree. She attends a school that charges $25,000 per year for tuition and related expenses. How much is the total cost (explicit cost plus opportunity cost) of that degree?

180,000

Which of the following is an example of non-human capital?

A pickup truck

Parker is a student who works after school and weekends at a local fast-food restaurant. His total gross income from his job is $9,500. Using his standard deduction of $13,850 and the 2023 tax tables, how much in taxes would Parker have to pay?

A. 0% Since Parker's standard deduction equals $13,850, which is greater than his gross income of $9,500, he does not have to pay any taxes.

Why do people keep money in transaction accounts?

A. Because funds can be withdrawn quickly so the money can be spent.

Which of the following is the most likely way for an employee to be paid?

A. By direct deposit Most workers are paid by direct deposit. A small proportion is still paid by check.

Taylor has read about U.S. savings bonds and has decided to invest $100 to buy one. How does the safety of these bonds compare to bonds issued by companies?

A. Company bonds are not as safe as U.S. government bonds.

Why does Zaida's income line jump so much when she is 38?

A. Her family expects to have two earners again.

Why do young workers, just starting their careers, tend to get pay raises that are greater than increases in the cost of living (inflation)?

A. They become more valuable to their employers.

Agnes and Dwayne married recently and have decided to wait ten years to have their first child. If, instead of saving their extra income, they use it to travel a lot during those ten years, what will happen?

A. They will probably not be able to retire as early as they could have otherwise.

If we receive a refund from our federal income tax, what does this mean?

A. Too much tax was withheld from our pay the previous year.

Why does Zaida's Alpha stage graph line include more years than Tyrell's graph?

A. Zaida's graph line includes more years because she plans to partner and/or marry later than Tyrell.

According to the National Association of Colleges and Employers, the projected salary for engineering college graduates was $74,405 in 2023, while the projected salary for social sciences graduates was $60,107. Since both fields require four years of college, which of the following accounts for at least some of the difference in starting salaries?

A: More students study social sciences than engineering.

If the demand increases more rapidly for software engineers than for office clerks, what would you expect to happen to the average pay for the two occupations?

A:The pay for software engineers will go up relative to the pay for office clerks.

In the table, which of the following is most likely to account for the large expected demand for registered nurses?

An aging American population needs increased health care.\

If someone makes tips from waiting tables, how does the government collect income tax on the tips that are received?

An employer withholds taxes on at least eight percent of the bills paid by customers a waiter served.

If you declare personal bankruptcy, how long will this stay on your credit report?

B. 10 years.

Which of the following is an advantage of belonging to a labor union vs. not belonging?

B. A union can bargain more effectively for higher wages or better benefits.

In order to be a long-term Bravo, you must:

B. Be partnered and/or married, but never have children.

The following items are deducted from Mario's pay: federal income tax, state income tax, Social Security and Medicare (FICA) tax, health insurance premium, and retirement savings plan contribution. These deductions leave him with a net (take-home) pay that is lower than his gross pay. Compared to his gross pay, Mario's net income:

B. Is less than his gross pay.

Chuck and Lin work for the same company and earn the same pay. Lin incorporates taking work-related classes into his weekly schedule to improve his computer skills, while Chuck makes time for socializing with friends. After five years, what is likely to be true?

B. Lin will make more money because the work-related class learnings are more valuable to his company.

Using the 2023 tax table, how much federal income tax will Sasha owe if she earns $16 per hour for 2,000 hours of work per year and has a standard deduction of $13,850?

C. $1,958 Her taxable income is equal to her gross income of $32,000 minus her standard deduction of $13,850 which equals $18,150. Her taxes are equal to 10% on the first $11,000 = $1,100 and 12% on the rest. If we subtract $11,000 from her taxable income of $18,150, we find that she must pay 12% on $7,150 which is equal to $858. If we add this to $1,100, we get total taxes of $1,958.

If Tom were legally married and his spouse was not working for pay, what would his 2023 taxable income be considering the standard deduction for married couples filing jointly is $27,700?

C. $3,500

During the two years he has been working, Darius has saved some money to buy a house. His parents have agreed to loan him part of the down payment, and he has started to look for a house he can afford. He discovered a great house that has two apartments in it. He has looked at all the information carefully, reviewed his budget, and thinks he can afford the house because he will live in only part of it and will rent out the other half. If Darius buys this house, lives in the apartment upstairs and rents out the apartment downstairs, which of the following is true?

C. Darius is a landlord because he rents out part of his house.

Which of the following statements is true about health insurance?

C. Employers are not legally required to pay for health insurance for their employees.

Which of the following helps explain why such a large proportion of women work outside of the home?

C. It generally takes two paid workers to live comfortably.

Why is Social Security considered to be a transfer payment?

C. It is not payment for work done in the current year.

The idea of family has changed over time in the U.S., in part because:

C. More people are choosing to have fewer children.

Why does income for a family tend to go up when couples decide to combine incomes?

C. New partnerships tend to have two earners.

Keisha is planning to stay at home with her children until they enter first grade. Keisha's husband Bob, however, has just pointed out to her that this may not be such a good idea. Keisha is a trainer at a big company, and she loves her job. She teaches others how to use the latest computer software. He suggests that she still work part time if she can arrange it with her employer. What is a benefit of Bob's suggestion?

C. Part-time work would help keep Keisha's skills up to date.

In which of the following life cycle stages will saving money tend to be most difficult?

Charlie stage

Why do manufacturing companies that use unskilled labor often move to states or countries where wages are the lowest?

Competing manufacturers can sell products for less if their workers cost less.

Sasha is a single woman who is paid $15 per hour for 2,000 hours of work per year. Using her 2023 standard deduction of $13,850, what is her taxable income?

D. $16,150

If Jayden does not pursue any post-secondary education, which statement is true?

D. He will likely have lower earnings than someone with a 4-year degree.

When Andrea graduates from high school in a few weeks, she is planning to take a trip across the United States. She has all of the money she saved for the trip in a savings account. A friend suggested that she earn more interest on that money by putting it into CDs, which she could not withdraw for a year. What is the problem with this suggestion?

D. You cannot easily withdraw money held in a CD without paying a penalty.

Jody is a factory worker. Business taxes are very high in Jody's state and many factories are moving to other states. If Jody does not move to where the jobs are, which of the following is she most likely to lose?

Future Income

Which of the following statements best describes the trend in union membership in the U.S.?

Government worker union members outnumber private sector union members by more than 5:1.

Why does Tyrell's income graph go up so much at age 26?

He gets partnered and/or married.

Juan has borrowed heavily to get through college and expects to be able to pay back his large student loans after he marries and begins a family. What will be a challenge associated with Juan's plan to pay back his student loans?

His family is likely to experience a drop in income (or increase in childcare costs) at this stage.

Why does Zaida's income line go down in the Foxtrot stage?

Income is expected to be less than before.

The portion of your health insurance paid by your employer:

Is not taxable.

In comparison to older employees with families, young people without children or dependents tend to need:

Less or no life insurance.

Which of the following is adjusted every year for inflation?

Marginal tax brackets

When we say that families headed by a self-employed person make significantly more than families whose head works for someone else, to which type of income do we refer?

Mean

If you work for a company and have a 401(k) retirement account, the account contains money you contributed to your retirement and money contributed by your employer. When you retire, which of the following will these payments be?

None of the above

Which of the following best describes the primary source of income for most people aged 20-35?

Salaries, wages, and tips

Each month, Gerald receives a government check from the college he attends because he is a work-study student. What are these checks?

Salary

Izza has come up with a great new device to hang her purse underneath a restaurant table, safe from those passing by and off the dirty floor. She wants to open a web site and bring it to market. Which important entrepreneurial trait does she have?

She is an innovator.

One Friday afternoon, Rose Marie went to her mailbox and found two envelopes addressed to her. One envelope contained a check for $152 from an extra job on the side (a freelance job) and the other contained a check for $25 from her grandmother. What kind of income did Rose Marie receive that day?

She received $152 in earned income and $25 in transfer payments.

Which of the following types of financial assets can be held in retirement accounts?

Stocks, bonds, or mutual funds

Why are people who live in or near cities paid higher average salaries than those who live in rural areas?

The demand for skilled workers and cost of living is high.

Two jobs are advertised online, one by the state government and the other by a fairly new, private company. The jobs appear to be similar in terms of work, salary, and benefits. The only difference is that the state government job likely offers more stable employment while the private company offers "employment at will," which means that you can be fired or laid off at any time. Which job is likely to have more applicants?

The job with the state government.

If four people of the same age each have the same education and skills, who will likely earn the greatest amount of money?

The one who lives in an urban area in the Northeast

Parents and/or caregivers enter the Echo stage when:

Their children begin to attend college.

Why do young people who want to be actors often end up waiting tables or doing temp work rather than acting professionally full time?

There are more people who want to be actors than paid acting jobs.

Why are personal care aides expected to be paid so little despite being in such great demand?

They have relatively little education.

Who benefits from deducting the amount paid in state income tax from their income for purposes of computing federal income tax?

Those whose total itemized deductions (including state income tax) is above their standard deduction.

. Why would NBA players, who make huge salaries that average in the millions of dollars, want to belong to a labor union?

To be able to bargain more effectively with team owners

Being a single parent and/or caregiver can be tough because:

Working to support the family often means paying a lot of money for childcare.

Which of the following is an advantage of owning your own business?

You won't have a boss to tell you what to do and when to do it.