Which of the Following Results in an Ordinary Gain or Loss

question 117

Multiple Choice

Which of the following results in an ordinary gain or loss?

• A)Sale of a machine at a gain.
• B)Sale of stock held for investment.
• C)Sale of a §1231 asset.
• D)Sale of inventory.
• E)None of the choices are correct.

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Definitions:

Budget Constraint

A line representing the combination of goods and services that a consumer can purchase with a given income.

Utility Function

A mathematical representation of how consumers derive satisfaction or utility from consuming goods and services.

Goods

Tangible products or items that satisfy human wants or needs.

Budget Constraint

An economic model that represents all the combinations of goods and services that a consumer can afford with a fixed amount of income.