A Review of the 2016 Tax File of Gregory,a Single

question 82

Multiple Choice

A review of the 2016 tax file of Gregory,a single taxpayer who is age 40,provides the following information regarding Gregory's 2016 tax status: In 2017,Gregory receives a reimbursement for last year's medical expenses of $1,200.As a result,Gregory must

• A)include $200 in gross income for 2017.
• B)include $1,200 in gross income for 2017.
• C)reduce 2017's medical expenses by $1,200.
• D)amend the 2016 return.

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Definitions:

Diminishing Marginal Returns

A principle stating that as additional units of a variable input are added to a fixed input, the additional output from each new unit of input will eventually decrease.

Variable Factors

Elements in production that can change in the short term, such as labor and raw materials, in contrast to fixed factors like capital.

Total Cost

The complete sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.

Output

the total amount of goods or services produced by a company, industry, or economy in a given period.