John Has $55,000 of Self-Employment Earnings from a Sole Proprietorship

question 123

Multiple Choice

John has $55,000 of self-employment earnings from a sole proprietorship.John is also employed part-time by a major corporation and is paid $25,000.John's self-employment tax for 2017 is

• A)$3,886.
• B)$4,208.
• C)$7,771.
• D)$8,415.

---

Definitions:

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the number of units produced.

Socially Optimal

A condition or point where the social welfare, including both consumer and producer welfare, is maximized, often considered in the analysis of market efficiency and interventions.

Pure Competition

A market structure characterized by a large number of small firms, homogeneous products, and easy entry and exit, leading to price taking behavior.

Long Run

A period in which all inputs can be adjusted by firms, allowing new firms to enter or exit the industry.