Proponents of Cuts in Income Tax Rates Argue That When

question 188

Multiple Choice

Proponents of cuts in income tax rates argue that when income tax rates are cut,workers have an incentive to increase their work hours.This argument is based on the assumption that

• A) workers are irrational.
• B) workers make decisions based on the marginal benefit of each hour worked compared to the marginal cost of work.
• C) the opportunity cost of working is negative.
• D) the marginal cost of each additional work hour is not important to most workers.
• E) workers make decisions based on the social interest.

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Definitions:

FIFO

"First In, First Out," an inventory valuation method assuming that the first items purchased are the first ones sold, affecting the cost of goods sold and ending inventory value.

Specific Identification

An accounting method used for inventory costing, where each item in inventory is identified and its cost is individually recorded.

LIFO

"Last In, First Out," a method of inventory valuation where the most recently produced or acquired items are the first to be expensed.

Average Cost

A method of inventory valuation which calculates the cost of goods sold and ending inventory based on the average cost of all similar items in inventory.