An Individual Would Willingly Give a Concert for $2,000

question 425

Multiple Choice

An individual would willingly give a concert for $2,000. If she is paid $5,000 for the concert, she is

• A) receiving $3,000 to cover her opportunity cost.
• B) not being paid her full opportunity cost.
• C) receiving $3,000 of economic rent.
• D) certainly being paid more than warranted by the level of demand.

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Definitions:

Double Taxation

The taxation of the same income or financial transaction at two different levels, such as corporate profits and then again as dividends to shareholders.

Corporation

A corporation is a legal entity that is separate and distinct from its owners, offering limited liability protection to its shareholders, and is capable of owning property, entering into contracts, and being taxed.

Income Taxes

Taxes imposed by the government on the income earned by individuals and corporations.

Partnerships

A business structure where two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.