Victor Receives a $2,000 Tax Credit for Childcare

question 82

Multiple Choice

Victor receives a $2,000 tax credit for childcare. The credit was earned because of Victor's expenditures for daycare for his son while Victor worked. What concept, construct, or doctrine helps explain why Victor receives this tax credit?

• A)Ability to Pay Concept.
• B)Administrative Convenience Concept.
• C)Arm's-Length Transaction Concept.
• D)Capital Recovery Concept.
• E)Pay-as-You-Go Concept.

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Definitions:

Marginal Cost Curve

A graph that displays how the expense of producing one additional unit of a good changes as production volume varies.

Average Variable Cost

The variable cost per unit of output.

Short-Run Marginal Cost

The cost incurred by producing one more unit of a product or service in the short term, where some inputs are fixed.

Average Variable Cost

The cost per unit of output that varies with the level of production, excluding fixed costs.