Alexis, a Cash Basis Contractor, Builds a Storage Building for Jones

question 115

Multiple Choice

Alexis, a cash basis contractor, builds a storage building for Jones. The building is completed, and the bill is given to Jones. Jones pays $60,000 in 2014. Subsequently, Jones files suit for damages based on alleged faulty construction. Alexis required to recognize $60,000 of income in 2014 based upon I. Constructive Receipt Doctrine. II. Claim-of-right Doctrine.

• A) Only statement I is correct
• B) Only statement II is correct
• C) Both statements are correct
• D) Neither statement is correct

Identify and distinguish between different types of taxes (e.g., regressive, proportional, progressive).

Understand the concept of tax incidence and how it affects both consumers and producers.

Comprehend the roles of price elasticity of demand and supply in determining the tax burden.

Calculate the impact of specific excise taxes on market outcomes, including price changes and tax revenue.

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Definitions:

Market Clearing Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded; also known as the equilibrium price.

Quantity Demanded

The quantity of a product or service buyers are prepared and capable of buying at a specific price.

Quantity Supplied

This term refers to the total amount of goods that sellers are ready to sell in the market at a certain price point, within a defined time frame.

Price Ceiling

A legal maximum price that can be charged for a good or service, aimed at preventing prices from becoming too high.