John Has $55,000 Net Earnings from a Sole Proprietorship

question 109

Multiple Choice

John has $55,000 net earnings from a sole proprietorship.John is also employed by a major corporation and is paid $25,000.John's self-employment tax (rounded) for 2014 is

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

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Definitions:

Unit Elastic

Describes a situation in which the percentage change in quantity demanded is equal to the percentage change in price, leading to no change in total revenue.

Income Elasticity

A measure of how much the demand for a good will change in response to a change in consumer's income.

Cross Elasticity

An indicator of the sensitivity in demand for a certain product in response to price fluctuations of a different product.

Percentage Change

A mathematical calculation that shows how much a number has increased or decreased compared to its previous value, expressed as a percentage.