If the two countries were to specialize and trade with one another, which country would import airplanes?
1 answer:
The country that should import airplanes is country A.
<h3>Which country should import airplanes?</h3>The country that should import airplanes is the country that does not have a comparative advantage in the production of airplanes. A country has comparative advantage in production if it produces at a lower opportunity cost when compared to other countries.
A country has a lower opportunity cost if it forgoes less quantity of an alternative product when producing another product.
Opportunity cost of country A in the production of airplanes: 8 million / 8 = 1 million
Opportunity cost of country B in the production of airplanes: 4 million / 6 = 670,000
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Answer: 17.56%
Explanation:
Given that,
Leonardo taxable income = $90,000
Tulsa bonds = $8,750
Theresa taxable income = $50,000
Computation of Leonardo's Tax:
According to the tax rate schedule,
Total Tax = Tax + 24% of taxable income over $82,500
= $14,089.50 + 24% × $7,500
= $14,089.50 + $1,800
= $15,889.5
Computation of Theresa's Tax:
According to the tax rate schedule,
Total Tax = Tax + 22% of taxable income over $38,700
= $4453.50 + 22% × $11,300
= $4453.50 + $2,486
= $6939.5
Total tax on Leonardo's income and Theresa's income:
= $15,889.5 + $6939.5
= $22,829
Effective tax rate =
=
= 17.56%