Figure 21-24 the Figure Shows Three Indifference Curves and a Budget

question 163

Multiple Choice

Figure 21-24 The figure shows three indifference curves and a budget constraint for a certain consumer named Steve.
-Refer to Figure 21-24. Which of the following pairs of prices matches the appearance of the budget constraint?

• A)price of apples = $6/pound; price of pears = $4/pound
• B)price of apples = $4/pound; price of pears = $6/pound
• C)price of apples = $6/pound; price of pears = $5/pound
• D)price of apples = $5/pound; price of pears = $6/pound

---

Definitions:

At-risk Rules

IRS rules limiting the amount of deductible losses from business or income-producing activity based on the taxpayer's financial stake in the activity.

Passive Loss Rules

IRS regulations that prevent investors from offsetting income with losses from passive activities unless they directly participate in them.

Disallowed Loss

A loss that cannot be deducted for tax purposes, often because it does not meet specific criteria set by tax authorities.

Passive Income

Income generated from ventures in which an individual is not actively involved.