Adam Purchased 1,000 Shares of Airco Inc

question 124

Multiple Choice

Adam purchased 1,000 shares of Airco Inc.common stock for $22,000 on February 3,2014.On April 1,2017,Adam received 100 new shares in a nontaxable stock dividend.As of April 1,the stock was trading at $25 per share.Adam sells the 100 new shares on June 15,2017 for $2,400.Due to the stock sale,Adam will recognize a

• A)$100 STCL.
• B)$2,400 STCG.
• C)$400 STCG.
• D)$400 LTCG.

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Definitions:

Efficient Allocation

The optimal distribution of resources in an economy, where resources are utilized in a manner that maximizes societal welfare without any wastage.

Rival in Consumption

A characteristic of a good whereby one person's consumption reduces the availability of the good for another person.

Rival in Consumption

A characteristic of a good whereby its consumption by one individual prevents simultaneous consumption by other individuals.

Excludable

An excludable good or service is one where it is possible to prevent people who have not paid for it from having access to it.