MrAnd MrsThibodeaux (Both Age 35),who Are Filing a Joint Return,have Adjusted

question 43

Multiple Choice

Mr.and Mrs.Thibodeaux (both age 35) ,who are filing a joint return,have adjusted gross income of $75,000.During the tax year,they paid the following medical expenses for themselves and for Mrs.Thibodeaux's mother,Mrs.Watson (age 63) .Mrs.Watson provided over one-half of her own support.

Mr.and Mrs.Thibodeaux received no reimbursement for the above expenditures.What is the amount of their deductible itemized medical expenses?

• A) $1,900
• B) $2,000
• C) $4,100
• D) $9,400

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Definitions:

Normal Profits

The minimum level of profit needed for a company to remain competitive in the market, also seen as the opportunity cost of capital.

Purely Competitive Firm

A business operating in a market where there are many buyers and sellers, with none being able to influence prices significantly by their individual actions.

Costs

The value of resources consumed in the production of goods and services, including both fixed and variable expenses.

Differentiated Product

A product that is distinct in some way from others in the same category, allowing the seller to compete on factors other than price.