On a particular Saturday, Tom had planned to paint a room in his house, but his employer gave him the opportunity to work that day. If Tom works, he must hire a painter for $120. For Tom to have a positive cash flow from working and hiring the painter:

On a particular Saturday, Tom had planned to paint a room in his house, but his employer gave him the opportunity to work that day. If Tom works, he must hire a painter for $120. For Tom to have a positive cash flow from working and hiring the painter:

On a particular Saturday, Tom had planned to paint a room in his house, but his employer gave him the opportunity to work that day. If Tom works, he must hire a painter for $120. For Tom to have a positive cash flow from working and hiring the painter:



a. Tom must earn more than $160 if he is in the 25% marginal tax bracket.
b. Tom must earn at least $160 if he is in the 33% marginal tax bracket.
c. Tom must earn at least $150 if he is in the 25% marginal tax bracket.
d. Tom must earn at least $135 if he is in the 15% marginal tax bracket.
e. None of these.


Answer: a Tom must earn more than $160 if he is in the 25% marginal tax bracket.


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