Joe Has $130,000 Net Earnings from a Sole Proprietorship

question 16

Multiple Choice

Joe has $130,000 net earnings from a sole proprietorship.Joe's self-employment tax (rounded) for 2014 is

• A)$17,990.
• B)$18,368.
• C)$19,890.
• D)None of the above.

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Definitions:

LMC Curves

Abbreviation for Long-Run Marginal Cost curves, which represent the cost to produce one additional unit of goods when all inputs can be varied.

Returns to Scale

The change in output resulting from proportional change in all inputs (factors of production); can be increasing, constant, or decreasing.

Returns to Scale

The change in output resulting from a proportional change in all inputs (factors of production); it identifies whether increasing inputs leads to proportionate, more than proportionate, or less than proportionate changes in output.

Marginal Cost Curve

A graphical representation that shows how the cost of producing one more unit of a good varies as the quantity of production increases.