Tom Ftompson Traded in a Station Wagon (Used in His

question 35

Multiple Choice

Tom ftompson traded in a station wagon (used in his business) which had an adjusted basis of $7,700 for a new one costing $26,900. fte auto dealer allowed a trade-in allowance of $8,000 on the old station wagon and Tom paid $18,900 in cash. What is Tom's basis in the new station wagon?

• A) $18,900
• B) $15,700
• C) $26,600
• D) $26,900

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Definitions:

Midpoint Method

A technique used in economics to calculate the percentage change in variables, offering a more precise measure of elasticity between two points.

Price Elasticity

A measure of how much the quantity demanded or supplied of a good changes in response to a change in price.

Total Revenue

The total income received by a firm from selling its goods or services.

Total Revenue

The total amount of money generated by the sale of goods or services before any expenses are subtracted.