In a Sole Proprietorship, the Profits Earned by the Business

question 35

Multiple Choice

In a sole proprietorship, the profits earned by the business are

• A) taxed as income for the business, but exempt from the personal income tax paid by the owner.
• B) taxed at the lowest corporate rate.
• C) the property of the owner, except for taxes owed to the government.
• D) tax-free if the appropriate exemption is filed with the local government.

---

Definitions:

Total Product

Total product refers to the total quantity of output produced by a firm within a given period as a result of inputs like labor and capital.

Average Product

The output per unit of input, calculated by dividing total product by the number of units of input.

Marginal Product

is the additional output that results from using one more unit of a particular input, holding other inputs constant.

Average Product

The output produced per unit of input, calculated by dividing total output by the number of units of input.