Prior to the Effect of the Tax Credits, Justin's Regular

question 21

Multiple Choice

Prior to the effect of the tax credits, Justin's regular income tax liability is $200,000, and his tentative minimum tax is $195,000.Justin reports the following credits. Calculate Justin's tax liability after credits.

• A)$190,000
• B)$194,000
• C)$195,000
• D)$200,000

---

Definitions:

Deadweight Losses

Economic inefficiencies that occur when equilibrium in a market is not achieved or when market allocation of resources is not optimal, often due to externalities or government intervention.

Consumer Surplus

A rephrased definition: The economic benefit that consumers receive when they can purchase a product for less than the maximum price they are willing to pay.

Consumer Surplus

The gap between the overall sum consumers are ready and able to spend on a product or service and what they really spend.

Cognitive Dissonance

A psychological discomfort experienced when simultaneously holding two or more conflicting beliefs, ideas, or values.