A Firm Might Choose to Produce Its Own Inputs If

question 83

Multiple Choice

A firm might choose to produce its own inputs if:

• A) specialized investment is not important.
• B) long-term contracts are costly to write.
• C) the exchange environment is not complex.
• D) spot markets for the input exist.

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Definitions:

Roth IRA

An individual retirement account allowing for tax-free withdrawals on qualified distributions, funded with after-tax dollars.

Tax-Free Withdraw

Taking money out of a financial account, such as a Roth IRA, without incurring tax liability on the distribution.

Nondeductible Contributions

Contributions to certain retirement accounts that cannot be deducted from current income taxes, but may potentially grow tax-free until withdrawal.

Tax Basis

The value of an asset for tax purposes, used to calculate gain or loss on the sale or other disposition of the asset.