Nora Acquired Passive Activity a Several Years Ago That Until

question 81

Multiple Choice

Nora acquired passive activity A several years ago that until 2011 was profitable.However, the activity produced losses of $100,000 in 2011 and $50,000 in 2012.Nora had passive income from activity B of $40,000 in 2011 and $0 in 2012.How much loss is suspended from activity A in each year?

• A)$60,000 in 2011 and $50,000 in 2012.
• B)$100,000 in 2011 and $50,000 in 2012.
• C)$0 in 2011 and $0 in 2012.
• D)None of the above.

---

Definitions:

Inferior Good

A good that has a negative income effect.

Goods

Physical items that satisfy human wants or needs and can be transferred or sold.

Price-Consumption Curve

Curve tracing the utility-maximizing combinations of two goods as the price of one changes.

Utility

A measure of satisfaction or happiness that a consumer derives from the consumption of goods and services.