In the Determination of Disposable Income, Transfer Payments Are Treated

question 172

Multiple Choice

In the determination of disposable income, transfer payments are treated as if they

• A)are the same as taxes.
• B)did not exist.
• C)are the opposite of taxes.
• D)were a constant amount.

---

Definitions:

Inelastic Portion

A segment of the demand curve where consumers are relatively unresponsive to price changes, indicating a demand elasticity of less than one.

Marginal Revenue

The additional income earned from selling one more unit of a product or service.

MR = MC

An economic principle stating that profit maximization occurs when marginal revenue equals marginal cost.

Profits

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain those activities.