The Opportunity Cost of an Action

question 5

Multiple Choice

The opportunity cost of an action:

• A) can be objectively determined only by economists.
• B) is a subjective valuation that can only be determined by the individual who chooses the action.
• C) can be determined by adding up the bills incurred as a result of the action.
• D) can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action.

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Definitions:

Taxpayers

Persons or organizations required to remit taxes to a government at the federal, state, or local level.

Tax Credits

Amounts that taxpayers can subtract directly from the taxes they owe to the government, rather than from taxable income.

Form 1040EZ

A simplified tax form for individuals with uncomplicated tax situations, no longer in use after 2018.

Tax Liability

The total amount of taxes owed by an individual, corporation, or other entities to the tax authorities after all applicable deductions, credits, and exemptions.