Bart Contributes $100,000 to the Fish Partnership for a 40 $\begin{array}{lr}\text { First Bank (recourse) } & \$ 10,000 \\\text { Second Bank (nonrecourse) } & 30,000\end{array}$

question 17

Multiple Choice

Bart contributes $100,000 to the Fish Partnership for a 40% interest. During the first year of operations, Fish has a profit of $20,000. At the end of the first year, Fish has outstanding loans from the following banks. $\begin{array}{lr}\text { First Bank (recourse) } & \$ 10,000 \\\text { Second Bank (nonrecourse) } & 30,000\end{array}$ What is Bart's at-risk basis in Fish at the end of the first year?

• A)$100,000
• B)$108,000
• C)$112,000
• D)$124,000
• E)None of the above

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Definitions:

Marginal Rate

The rate at which one quantity changes relative to a change in another quantity.

Substitution

The economic principle where consumers replace pricier items with less expensive alternatives when prices rise or their purchasing power decreases.

Indifference Curve

This is a graph representing different bundles of goods between which a consumer is indifferent, meaning that each combination offers the same level of utility to the consumer.

Indifference Curves

Graphical representations in microeconomics showing different bundles of goods between which a consumer is indifferent.