Under the Terms of a Divorce Agreement Entered into in 2017

question 50

Multiple Choice

Under the terms of a divorce agreement entered into in 2017, Lanny was to pay his wife Joyce $2,000 per month in alimony and $500 per month in child support. For a twelve-month period, Lanny can deduct from gross income (and Joyce must include in gross income) :

• A) $0.
• B) $6,000.
• C) $24,000.
• D) $30,000.
• E) None of these.

---

Definitions:

Cross-Price Elasticity

A measurement of how the quantity demanded of one good responds to a change in the price of another good.

Negative

A term often indicating a subtraction, a deficit, or an unfavorable outcome in various contexts.

Unrelated Goods

denotes two or more goods that have no direct connection in consumption or production, implying no cross-price elasticity between them.

Complementary Goods

Products or services that are consumed together because the use of one enhances the use of the other.