Mike Is a Self-Employed TV Technician

question 5

Essay

Mike is a self-employed TV technician.He is usually paid as soon as he completes repairs, but occasionally bills a customer with payment expected within 30 days.At the end of the year he has $2,500 of receivables outstanding.He expects to collect $1,200 of this and write off the remainder.Mike is a cash basis taxpayer and had net earnings from his business (not including the effect of the items above) of $55,000.He also had $3,500 interest income, $200 gambling winnings, and sold corporate stock for $7,000.The stock had been purchased in 2009 for $8,200.Mike is single, has no dependents, and claims the standard deduction.What is his 2012 taxable income? (Ignore the self-employment tax deduction.)

Understand the concepts of marginal revenue product and its influence on labor demand.

Decode the significance of economic rent in differentiating the earnings of various jobholders.

Learn how to calculate real wages and understand their significance over time.

Recognize the influence of supply and demand in setting wage levels and economic rent.

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Definitions:

Pragmatic, Business-Like Approach

A practical and realistic method of dealing with business situations, focusing on results and efficiency instead of theory or ideals.

Labor Unions

Organizations that represent the collective interests of workers, negotiating wages, benefits, and working conditions with employers.

Mainstream Economics

The dominant school of thought in economics, focusing on the analysis of market behavior and the allocation of resources through the price mechanism.

Institutional Labor Economics

A branch of economics that studies the way institutions and societal norms impact labor markets, employment, and wage setting.