Which of the Following Are Legal Methods of Reducing Your

question 26

Multiple Choice

Which of the following are legal methods of reducing your current tax liability?

• A)not reporting taxable income you receive
• B)investing in a tax deferred annuity
• C)shifting income to your children
• D)writing off deductions above the actual amount(s) spent
• E)b and c

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Definitions:

Market Price

The actual selling price of goods or services available in the marketplace at any given time.

Marginal Revenue

Marginal revenue is the additional income earned from selling one more unit of a good or service.

Marginal Cost

The change in total cost that arises when the quantity produced changes by one unit; essentially the cost of producing one additional unit of a good or service.

Price-Taker Firm

A firm that has no control over the market price and must accept the prevailing market price for its product.