Kevin and Sue Have Two Children, Ages 8 and 14

question 40

Multiple Choice

Kevin and Sue have two children, ages 8 and 14. They spend $6,200 per year on eligible employment related expenses for the care of their children after school. Kevin earned a salary of $20,000 and Sue earned a salary of $18,000. What is the amount of the credit for child and dependent care expenses?

• A) $690
• B) $713
• C) $1,380
• D) $1,426

---

Definitions:

Price System

An economic mechanism that uses prices arising from supply and demand interactions to communicate information to help guide the allocation of resources.

Scarce Goods

Goods that are limited in supply in comparison to their demand, necessitating allocation mechanisms.

Automatically Distributes

Refers to processes or systems that allocate resources, duties, or information without the need for human intervention.

Price Rationing

The process by which the market system allocates goods and services to consumers when quantity demanded exceeds quantity supplied.