To derive personal income from national income, you
a. subtract retained earnings, Social Security taxes, and transfer payments, and add in corporate business taxes
b. subtract retained earnings, Social Security taxes, corporate business taxes, and add in transfer payments
c. subtract retained earnings, corporate business taxes, and transfer payments, and add in Social Security taxes
d. subtract corporate business taxes, Social Security taxes and transfer payments, and add in retained earnings
e. subtract Social Security taxes, retained earnings, and personal taxes, and add in transfer payments
B
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The concept of limited liability
A) does not apply to a corporation. B) means that the owners of a corporation have liability limited to the value of the shares in the firm. C) means that owners of a firm are subject to double taxation. D) limits the amount of specialization that can occur in a firm.
Rick buys a 1966 Mustang for $3,000 . planning to restore and sell the car. He goes on to spend $9,000 restoring the car. At this point he can sell the car for $10,000 . As an alternative, he can spend an additional $3,000 replacing the engine. With a new engine the car would sell for $13,000 . Rick should
a. complete the repairs and sell the car for $13,000. b. sell the car now for $10,000. c. never try such an expensive project again. d. be indifferent between (i) selling the car now and (ii) replacing the engine and then selling it.