Maureen Is Injured on the Job and Has to Retire

question 98

Multiple Choice

Maureen is injured on the job and has to retire. Before her retirement, Maureen earned $20,000 in wages. After her retirement, her employer pays her $5,000 for vacation time that accrued before she was injured. In addition, she receives $10,000 to compensate her for sick pay from an accident and health insurance plan that was paid for by her employer. How much of the above payments should Maureen include in her gross income?

• A)$10,000
• B)$20,000
• C)$25,000
• D)$30,000
• E)$35,000

---

Definitions:

Occupations

Refers to various jobs or professions that individuals engage in to earn income and contribute to the economy.

Elasticity Coefficient

A numerical measure of the responsiveness of the quantity demanded or supplied of a good or service to a change in one of its determinants, such as price.

Elastic

Describes a situation in economics where the demand for a product or service significantly changes in response to a price change.

Substitution Effect

The change in consumption resulting from a change in the relative prices of goods, leading consumers to substitute one good for another.