A Friend Says, "I Really, Really Need a New Car

question 316

Multiple Choice

A friend says, "I really, really need a new car." As an economist, you're thinking

• A) Right! Everyone needs a new car.
• B) This is an example of how objectively undefinable needs are. Many would argue that this friend could get along just fine with a reliable used car.
• C) If this friend says she needs a new car, then we must all agree that a new car is a need and not just a want.
• D) that a new car can only be considered a need if at least 51% of the public agrees.

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Definitions:

Tax Liability

The total amount of tax that individuals or entities are legally obligated to pay to a taxing authority based on their income, property, or other taxable assets.

Married Filing Jointly

A tax filing status for married couples who choose to combine their income and deductions on one tax return.

Single Filing Status

A tax filing status for individuals who are unmarried and do not qualify for other filing statuses.

Circular 230

A set of regulations governing tax professionals who represent taxpayers before the IRS, ensuring practitioners meet ethical and practice standards.