In December 2018, Ben and Jeri (Married Filing Jointly)have a Long-Term

question 62

Multiple Choice

In December 2018, Ben and Jeri (married filing jointly) have a long-term capital gain of $55,000 on the sale of stock held for 4 years.They have no other capital gains and losses for the year.After the standard deduction, their ordinary income for the year, before the capital gain, is $76,900, making their total income for the year $131,900 ($76,900 + $55,000) .In 2018, married taxpayers who file jointly pay tax of $8,850 on the first $76,900 of ordinary taxable income and 15% on long-term capital gains above $77,200.What is their total tax liability?

• A)$8,850
• B)$17,100
• C)$17,055
• D)$17,136

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Definitions:

Collusion

A secret agreement between firms in a market to fix prices, limit production, or divide markets, in order to reduce competition and increase profits.

Marginal Cost

The additional cost incurred for the production of one more unit of a good or service, an essential concept for making efficient production decisions.

Oligopoly

A market structure characterized by a small number of firms controlling a large market share, resulting in limited competition.

Competitive Ideal

A market situation wherein there is perfect competition, with no single buyer or seller able to influence prices or market conditions.