Question

Problem 3.15 page 37 Consider an economy with a flat rate tax system Each dollar of income over $5000 is taxed at 20 Income below $5000 is tax free In general T 2 Y 5000 1000 2Y where T is taxes and Y is income Suppose that the population mean income is $20000 and that the population standard deviation of incomes is $8000 All families have at least $5000 of income a find the mean of T b

Find the standard deviation of T c If the population contains 20 million families what is the government s total tax revenue

Answer 1

Standard deviation of Tc is 1600

Step-by-step explanation:

See attached file