Donna Can Make a Chair for About $100, She Charges

question 78

Multiple Choice

Donna can make a chair for about $100, she charges customers $150 to buy the chair, and customers perceive that the chair is worth $225. In this case, the consumer surplus is:

• A) $50.
• B) $75.
• C) $125.
• D) $150.
• E) $225.

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Definitions:

Payroll Register

A document listing each employee’s pay details for each payroll period, including wages, deductions, and net pay.

FICA Tax

Federal Insurance Contributions Act tax; a U.S. federal payroll tax that funds Social Security and Medicare.

Medicare Tax

A federal payroll tax that funds Medicare, the health insurance program for individuals aged 65 and over, as well as for some younger people with disability status as determined by the Social Security Administration.

Payroll Period

The interval of time for which an employee's wages are calculated, such as weekly, bi-weekly, or monthly.