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(a) The income I = 12000 in this case, so the functional form is T(12000)

the tax owed on an income of 12,000 is given by T(12000) = 0.14*12,000-100 = 1580

(b) At 14,000, your tax is T(14,000) = 0.14*14,000 -100 = 1860

The increase equals the tax at 14,000, minus the tax at 12,000 or 1860-1580 = 280

(c) At 16,000, your tax is T(16,000) = 0.14*16,000-100 = 2140

The increase equals the tax at 16,000, minus the tax at 14,000 or 2140 - 1860 = 280

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