Microeconomics 13th Edition by Russell Sobel, David Macpherson, Richard Stroup, James Gwartney

Exercise 7

*Sue is a single parent with two children. She is considering a part-time job that pays $800 per month. She is currently drawing monthly cash benefits of $300, food stamp benefits of $100, and Medicaid benefits valued at $80. If she accepts the job, she will be liable for employment taxes of $56 per month and lose all transfer benefits. What is Sue's implicit marginal tax rate for this job?