Because of Diminishing Returns, a Factor in Abundant Supply Has

question 118

Multiple Choice

Because of diminishing returns, a factor in abundant supply has a

• A)high marginal product and a high rental price.
• B)high marginal product and a low rental price.
• C)low marginal product and a high rental price.
• D)low marginal product and a low rental price.

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Definitions:

Donee's Basis

The value assigned to a gift or inherited property for the purpose of determining gain or loss when the property is sold by the recipient.

FMV

The estimated sales price of an asset in the marketplace where both buyer and seller are informed and willing.

Code Sections 1245

Refers to a section of the U.S. Internal Revenue Code that deals with the recapture of depreciation upon the sale of certain types of business property.

Recapture Provisions

Regulations that allow the government to collect taxes on previously deducted or credited investment income when certain assets are sold or disposed of.