In Which,if Any,of the Following Independent Situations Has Fred Made

question 101

Multiple Choice

In which,if any,of the following independent situations has Fred made a gift?

• A)Fred established a revocable trust,income payable to himself for life and,upon his death,remainder to his children.
• B)Fred dies owning a U.S.savings bond with ownership listed as: "Fred,payable to Sue on Fred's death." Sue redeems the bond.
• C)Fred sends $25,000 to Alice's oral surgeon in payment of her dental implants.Alice is Fred's sister and does not qualify as his dependent.
• D)Fred pays Eva $800,000 in a pre-nuptial settlement of her marital rights.One month later Fred and Eva are married.
• E)None of the above.

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Definitions:

Maximize Profit

The process of increasing the difference between the cost of production and the revenue generated from sales to the highest possible level.

Short Run

A period during which at least one factor of production is fixed, limiting the ability to adjust to changing market conditions.

Production

The process of creating goods or services using labor, machinery, and raw materials.

Price Taker

A market participant that accepts prevailing market prices as given, without having the power to influence these prices.