Which of the Following Should Increase the Likelihood That Mr

question 36

Multiple Choice

Which of the following should increase the likelihood that Mr.Clarke's Form 1040 will be selected for audit by the IRS?

• A)Mr.Clarke is self-employed and reported $723,900 net profit on his Schedule C.
• B)Mr.Clarke has four dependent children under age 17.
• C)Mr.Clarke is a resident of California.
• D)None of the above should increase the likelihood of audit.

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Definitions:

Utility Function

A mathematical representation that ranks individuals' preferences for sets of consumption bundles.

Budget Equation

A financial formula that balances income and expenditures, often used in personal finance or government budgeting.

Maximize Utility

The goal of consumers in economic theory, aiming to achieve the greatest satisfaction possible from their resources and choices.

Marginal Utility

The change in satisfaction or utility that an individual gains from consuming an additional unit of a good or service.