Ethan Competed in the Annual Austin Marathon This Year and Won

question 10

Multiple Choice

Ethan competed in the annual Austin Marathon this year and won a $25,000 prize for fastest wheelchair entrant. Ethan indicated that he would transfer the prize to the local hospital. How much of the prize should Ethan include in his gross income?

• A)$25,000
• B)$25,000 because all prizes are taxable
• C)$0 because prizes transferred to charities are excludable
• D)$0 because all prizes are excludable
• E)$0 because prizes from charities are excludable

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Definitions:

Crowding Model

An economic theory that describes how public sector employment can impact wages and employment levels in the private sector.

Occupational Segregation

The crowding of women or minorities into less desirable, lower-paying occupations.

Domestic Output

The sum of the value of all products and services made within the confines of a country during a particular time frame.

Lorenz Curve

A curve showing the distribution of income in an economy. The cumulated percentage of families (income receivers) is measured along the horizontal axis and the cumulated percentage of income is measured along the vertical axis.