On May 18 of Last Year,Carter Sells Unlisted Stock with a Cost

question 42

Multiple Choice

On May 18 of last year,Carter sells unlisted stock with a cost of $24,000 for $60,000.Carter collects $20,000 initially and is scheduled to receive $10,000 each year for four years starting this year plus an acceptable rate of interest.After receiving the first $10,000 scheduled installment payment,Carter is unable to collect any further payments.After incurring legal fees of $1,000,Carter recovers a portion of the stock valued at $26,000.As a result of the repossession,Carter must report

• A)ordinary income of $9,000.
• B)capital gain of $9,000.
• C)ordinary income of $13,000.
• D)capital gain of $13,000.

Explain the effects of price ceilings and price floors on market equilibrium.

Analyze the consequences of shifts in supply and demand on equilibrium price and quantity.

Describe the relationship between price and quantity demanded (Law of Demand).

Describe the relationship between price and quantity supplied (Law of Supply).

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Definitions:

Purely Competitive Industry

A market structure characterized by many small firms producing identical products, with no single firm able to influence market prices.

Long Run

A period of time in economics where all factors of production and costs can be varied, allowing for the adjustment of all inputs.

Corn Market

The trading environment for corn, including its production, distribution, and sale.