Norman Exchanges a Machine He Uses in His Pool Construction

question 72

Multiple Choice

Norman exchanges a machine he uses in his pool construction business for a used machine worth $6,000 to use in the same business. He purchased the machine 3 years ago for $22,000 and has taken depreciation of $9,000 on the machine. In the exchange, Norman also receives $3,000 of cash. As a result of the exchange,
I.Norman's basis in the acquired machine is $6,000.
II.Norman recognizes a loss of $4,000 on the exchange.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Stimulus Presentation

The act of introducing a stimulus to a subject's sensory medium (e.g., visual, auditory) to provoke a response or examine the subject's behavior in psychological experiments.

Schedule of Reinforcement

A plan or strategy in behavioral psychology for determining which responses will be reinforced to shape or modify behavior.

Partial Reinforcement

A conditioning strategy in which a reward is not administered every time the desired behavior is performed, often leading to more resistant behavior change.

Reinforcers

Stimuli, which when presented after a behavior, increase the likelihood of that behavior being repeated.