The Total Debts of You and Your Spouse Include the Following

question 95

Multiple Choice

The total debts of you and your spouse include the following: mortgage, $180,000; auto loan, $10,000; credit card balance, $2,000; and other debts of $6,000. Further, you estimate that your funeral will cost $4,000. Your spouse expects to continue to work after your death. What is your life insurance need using the DINK method?

• A) $103,000
• B) $106,000
• C) $226,000
• D) $202,000
• E) $99,000

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Definitions:

Short-Run Supply

The supply of goods that varies with changes in price in the short term, where at least one factor of production is fixed.

Average Variable Cost

The total variable costs divided by the quantity of output produced, indicating the average cost of production per unit when fixed costs are excluded.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service.

Shut Down

A short-term decision by a firm to cease operations when variable costs exceed revenues, typically in a perfect competition scenario.