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Question : 6.5   Are Markets Fair? 1) Economists conclude that the only way : 1241554

Economics

 

6.5   Are Markets Fair?

 

1) Economists conclude that the only way to measure fairness is

A) to insure that the rules are fair.

B) to insure that the result is fair.

C) to insure that both the rules and the result are fair.

D) to compare the allocatively efficient quantity to the equilibrium quantity.

E) None of the above answers is correct.

2) The “equality of opportunity” idea of fairness claims

A) a society should make the poorest as well off as possible.

B) the results and the rules should both be fair.

C) it’s not fair if the rules aren’t fair.

D) private property can be transferred under government order.

E) only a first-come, first-served system of allocating resources is fair.

 

3) Assume the Nozick rules are being followed in the economy so that the distribution of income is fair. What must be true for this to create an efficient allocation of resources?

A) All people are earning equal incomes.

B) There are no public goods, monopolies, high transactions costs, or external costs and benefits.

C) The costs of administering redistribution equals the benefits the poor receive.

D) The government must redistribute income in a fashion that minimizes the “big tradeoff.”

E) The government must allocate resources using a command mechanism.

 

4) An unequal distribution of income is considered fair according to Robert Nozick if

A) marginal cost equals marginal benefit.

B) the cost of administering a welfare system is minimized.

C) property rights are enforced and voluntary exchange occurs.

D) the economy is producing its maximum total output.

E) resources are allocated using the command method.

5) Which of the following is most closely related to the “fair results” approach to fairness?

A) efficient resource use

B) having an equal income distribution

C) voluntary exchange

D) the command system of allocating resources

E) price hikes in a natural disaster

 

6) Outcomes are fair according to the

A) rules view if private property rights are established and trade is voluntary.

B) results view if private property rights are established and trade is voluntary.

C) rules view if there is not too much inequality.

D) results view if there is not a big tradeoff.

E) results view if there is equality of opportunity.

 

7) The “big tradeoff” refers to

A) producing capital goods instead of consumable goods.

B) marginal benefit versus marginal cost.

C) efficiency and fairness.

D) taking an economics course instead of some other course.

E) using market prices rather than a command system to allocate resources.

 

8) The idea of the “big tradeoff” points out the costs of

A) using a results approach to fairness when the rules approach is correct.

B) transferring income using taxes that decrease efficiency.

C) price hikes during natural disasters.

D) using a rules approach to fairness when the results approach is correct.

E) None of the above answers is correct.

9) When economists use the term “big tradeoff” when discussing efficiency they are referring to the tradeoff between

A) external costs and external benefits.

B) marginal cost and marginal benefits.

C) producer surplus and consumer surplus.

D) efficiency and fairness.

E) deadweight loss and producer/consumer surplus.

 

10) Which of the following is true for taxes? They

A) are always administered fairly.

B) are a necessary part of living in an economy with a fair distribution of income.

C) are always administered without creating unfairness or inefficiency.

D) are an involuntary transfer of private property.

E) do not create a big tradeoff problem.

 

 

 

 

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July 1, 2023
    

Please complete the tax return for Individual Tax return Problem 4 in appendix C found on page C-5 in your textbook. Fill in the PDF forms found at irs.gov and attach them to this assignment, using the blue submission link above.

 

Tax Return 2 is based on Individual Tax return 4 in appendix C on page C-5 of your textbook.  You should begin working on this return now as it is complex and will require more time than the first return. 

You will need a form 1040 with a schedule C, D,SE, Form 4562,4797,8949 and 8960. Here are some check figures:

AGI:  $383,538, NO AMT, Line 61 total tax:  $86,011, Schedule C line 31:  $59,056, Schedule D line 15: $190,832, Schedule SE line 5 $8,344

Form 4562 line 22: $606,264, Form 4797 lin 18b $81,867

 

 

 

INDIVIDUAL TAX RETURN PROBLEM 4

Required:

  • Use the following information to complete Phillip and Claire Dunphy's 2013 federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps. Ignore the alternative minimum tax for this problem.

  • Any required forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the forms.

Facts:

    1. Phillip and Claire are married and file a joint return. Phillip is self-employed as a real estate agent, and Claire is a flight attendant. Phillip and Claire have three dependent children. All three children live at home with Phillip and Claire for the entire year.

      The Dunphys provide you with the following additional information:

      • The Dunphys do not want to contribute to the presidential election campaign.

      • The Dunphys live at 3701 Brighton Avenue, Los Angeles, CA 90018.

      • Phillip's birthday is 11/5/1967 and his Social Security number is 321-44-5766.

      • Claire's birthday is 5/12/1970 and her Social Security number is 567-77-1258.

      • Haley's birthday is 11/6/2001 and her Social Security number is 621-18-7592.

      • Alex's birthday is 2/1/2003 and her Social Security number is 621-92-8751.

      • Luke's birthday is 12/12/2007 and his Social Security number is 621-99-9926.

      • The Dunphys do not have any foreign bank accounts or trusts.

    2. Claire is a flight attendant for Western American Airlines (WAA), where she earned $57,000 in salary. WAA withheld federal income tax of $6,375, state income tax of $1,800, Los Angeles city income tax of $675, Social Security tax of $3,600, and Medicare tax of $825.

    3. Phillip and Claire received $300 of interest from State Savings Bank on a joint account. They also received a qualified dividend of $395 on jointly owned stock in Xila Corporation.

    4. Phillip's full-time real estate business is named “Phillip Dunphy Realty.” His business is located at 645 Grove Street, Los Angeles, CA 90018, and his employer identification number is 93-3488888. Phillip's gross receipts during the year were $730,000. Phillip uses the cash method of accounting for his business. Phillip's business expenses are as follows:

       

      Advertising $ 5,000
      Professional dues 800
      Professional journals 200
      Employee wages 48,000
      Insurance on office contents 1,120
      Accounting services 2,100
      Miscellaneous office expense 500
      Utilities and telephone 3,360
      Payroll taxes 3,600
      Depreciation To be calculated

      On March 20, Phillip moved his business out of the old offices at 1103 Allium Lane into a newly constructed and equipped office on Grove Street. Phillip sold the old office building and all its furnishings. Phillip's expenditures for the new office building are as follows:

      Date Acquired Asset Cost
      3/20 Land $ 300,000
      3/20 Office building 2,500,000
      3/20 Furniture 200,000
      4/1 Computer system 350,000
      6/1 Artwork 150,000

      Phillip computes his cost recovery allowance using MACRS. He would like to use the §179 immediate expensing, but he has elected to not claim any bonus depreciation. Phillip has never claimed §179 or bonus depreciation before. The assets Phillip sold on March 20 are as follows:

      Date Acquired Asset Sales Price Original Cost Accumulated Depreciation as of Beginning of the Year
      5/1/07 Office building $940,000 $900,000 $129,825
      5/1/07 Land 200,000 100,000 0
      7/1/07 Furniture 50,000 239,000 206,998
      8/13/09 Furniture 10,000 324,000 222,782
      4/12/10 Office equipment 100,000 120,000 67,524
      5/13/12 Computers $ 30,000 50,000 10,000

      Phillip has never sold any assets relating to his business before this transaction.

  1. The Dunphys sold 60 shares of Fizbo Corporation common stock on September 3, for $65 a share (minus a $50 total commission). The Dunphys purchased the stock on November 8, 2012, for $90 a share. They also sold a painting for $13,000 on March 1. Claire purchased the painting for $20,050 on September 1, 2006, as an investment.

  2. The Dunphys filed their 2012 federal, state, and local returns on April 13, 2013. They paid the following additional 2012 taxes with their returns: federal income taxes of $630, state income taxes of $250, and city income taxes of $75.

  3. The Dunphys made timely estimated federal income tax payments of $19,000 each quarter during 2013. They also made estimated state income tax payments of $1,000 each quarter and estimated city income tax payments of $300 each quarter. The Dunphys made all fourth-quarter payments on December 31, 2013. They would like to receive a refund for any overpayments.

default image
July 1, 2023
    

Please complete the tax return for Individual Tax return Problem 4 in appendix C found on page C-5 in your textbook. Fill in the PDF forms found at irs.gov and attach them to this assignment, using the blue submission link above.

 

Tax Return 2 is based on Individual Tax return 4 in appendix C on page C-5 of your textbook.  You should begin working on this return now as it is complex and will require more time than the first return. 

You will need a form 1040 with a schedule C, D,SE, Form 4562,4797,8949 and 8960. Here are some check figures:

AGI:  $383,538, NO AMT, Line 61 total tax:  $86,011, Schedule C line 31:  $59,056, Schedule D line 15: $190,832, Schedule SE line 5 $8,344

Form 4562 line 22: $606,264, Form 4797 lin 18b $81,867

 

 

 

INDIVIDUAL TAX RETURN PROBLEM 4

Required:

  • Use the following information to complete Phillip and Claire Dunphy's 2013 federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps. Ignore the alternative minimum tax for this problem.

  • Any required forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the forms.

Facts:

    1. Phillip and Claire are married and file a joint return. Phillip is self-employed as a real estate agent, and Claire is a flight attendant. Phillip and Claire have three dependent children. All three children live at home with Phillip and Claire for the entire year.

      The Dunphys provide you with the following additional information:

      • The Dunphys do not want to contribute to the presidential election campaign.

      • The Dunphys live at 3701 Brighton Avenue, Los Angeles, CA 90018.

      • Phillip's birthday is 11/5/1967 and his Social Security number is 321-44-5766.

      • Claire's birthday is 5/12/1970 and her Social Security number is 567-77-1258.

      • Haley's birthday is 11/6/2001 and her Social Security number is 621-18-7592.

      • Alex's birthday is 2/1/2003 and her Social Security number is 621-92-8751.

      • Luke's birthday is 12/12/2007 and his Social Security number is 621-99-9926.

      • The Dunphys do not have any foreign bank accounts or trusts.

    2. Claire is a flight attendant for Western American Airlines (WAA), where she earned $57,000 in salary. WAA withheld federal income tax of $6,375, state income tax of $1,800, Los Angeles city income tax of $675, Social Security tax of $3,600, and Medicare tax of $825.

    3. Phillip and Claire received $300 of interest from State Savings Bank on a joint account. They also received a qualified dividend of $395 on jointly owned stock in Xila Corporation.

    4. Phillip's full-time real estate business is named “Phillip Dunphy Realty.” His business is located at 645 Grove Street, Los Angeles, CA 90018, and his employer identification number is 93-3488888. Phillip's gross receipts during the year were $730,000. Phillip uses the cash method of accounting for his business. Phillip's business expenses are as follows:

       

      Advertising $ 5,000
      Professional dues 800
      Professional journals 200
      Employee wages 48,000
      Insurance on office contents 1,120
      Accounting services 2,100
      Miscellaneous office expense 500
      Utilities and telephone 3,360
      Payroll taxes 3,600
      Depreciation To be calculated

      On March 20, Phillip moved his business out of the old offices at 1103 Allium Lane into a newly constructed and equipped office on Grove Street. Phillip sold the old office building and all its furnishings. Phillip's expenditures for the new office building are as follows:

      Date Acquired Asset Cost
      3/20 Land $ 300,000
      3/20 Office building 2,500,000
      3/20 Furniture 200,000
      4/1 Computer system 350,000
      6/1 Artwork 150,000

      Phillip computes his cost recovery allowance using MACRS. He would like to use the §179 immediate expensing, but he has elected to not claim any bonus depreciation. Phillip has never claimed §179 or bonus depreciation before. The assets Phillip sold on March 20 are as follows:

      Date Acquired Asset Sales Price Original Cost Accumulated Depreciation as of Beginning of the Year
      5/1/07 Office building $940,000 $900,000 $129,825
      5/1/07 Land 200,000 100,000 0
      7/1/07 Furniture 50,000 239,000 206,998
      8/13/09 Furniture 10,000 324,000 222,782
      4/12/10 Office equipment 100,000 120,000 67,524
      5/13/12 Computers $ 30,000 50,000 10,000

      Phillip has never sold any assets relating to his business before this transaction.

  1. The Dunphys sold 60 shares of Fizbo Corporation common stock on September 3, for $65 a share (minus a $50 total commission). The Dunphys purchased the stock on November 8, 2012, for $90 a share. They also sold a painting for $13,000 on March 1. Claire purchased the painting for $20,050 on September 1, 2006, as an investment.

  2. The Dunphys filed their 2012 federal, state, and local returns on April 13, 2013. They paid the following additional 2012 taxes with their returns: federal income taxes of $630, state income taxes of $250, and city income taxes of $75.

  3. The Dunphys made timely estimated federal income tax payments of $19,000 each quarter during 2013. They also made estimated state income tax payments of $1,000 each quarter and estimated city income tax payments of $300 each quarter. The Dunphys made all fourth-quarter payments on December 31, 2013. They would like to receive a refund for any overpayments.

default image
July 1, 2023
    

Please complete the tax return for Individual Tax return Problem 4 in appendix C found on page C-5 in your textbook. Fill in the PDF forms found at irs.gov and attach them to this assignment, using the blue submission link above.

 

Tax Return 2 is based on Individual Tax return 4 in appendix C on page C-5 of your textbook.  You should begin working on this return now as it is complex and will require more time than the first return. 

You will need a form 1040 with a schedule C, D,SE, Form 4562,4797,8949 and 8960. Here are some check figures:

AGI:  $383,538, NO AMT, Line 61 total tax:  $86,011, Schedule C line 31:  $59,056, Schedule D line 15: $190,832, Schedule SE line 5 $8,344

Form 4562 line 22: $606,264, Form 4797 lin 18b $81,867

 

 

 

INDIVIDUAL TAX RETURN PROBLEM 4

Required:

  • Use the following information to complete Phillip and Claire Dunphy's 2013 federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps. Ignore the alternative minimum tax for this problem.

  • Any required forms, schedules, and instructions can be found at the IRS website (www.irs.gov). The instructions can be helpful in completing the forms.

Facts:

    1. Phillip and Claire are married and file a joint return. Phillip is self-employed as a real estate agent, and Claire is a flight attendant. Phillip and Claire have three dependent children. All three children live at home with Phillip and Claire for the entire year.

      The Dunphys provide you with the following additional information:

      • The Dunphys do not want to contribute to the presidential election campaign.

      • The Dunphys live at 3701 Brighton Avenue, Los Angeles, CA 90018.

      • Phillip's birthday is 11/5/1967 and his Social Security number is 321-44-5766.

      • Claire's birthday is 5/12/1970 and her Social Security number is 567-77-1258.

      • Haley's birthday is 11/6/2001 and her Social Security number is 621-18-7592.

      • Alex's birthday is 2/1/2003 and her Social Security number is 621-92-8751.

      • Luke's birthday is 12/12/2007 and his Social Security number is 621-99-9926.

      • The Dunphys do not have any foreign bank accounts or trusts.

    2. Claire is a flight attendant for Western American Airlines (WAA), where she earned $57,000 in salary. WAA withheld federal income tax of $6,375, state income tax of $1,800, Los Angeles city income tax of $675, Social Security tax of $3,600, and Medicare tax of $825.

    3. Phillip and Claire received $300 of interest from State Savings Bank on a joint account. They also received a qualified dividend of $395 on jointly owned stock in Xila Corporation.

    4. Phillip's full-time real estate business is named “Phillip Dunphy Realty.” His business is located at 645 Grove Street, Los Angeles, CA 90018, and his employer identification number is 93-3488888. Phillip's gross receipts during the year were $730,000. Phillip uses the cash method of accounting for his business. Phillip's business expenses are as follows:

       

      Advertising $ 5,000
      Professional dues 800
      Professional journals 200
      Employee wages 48,000
      Insurance on office contents 1,120
      Accounting services 2,100
      Miscellaneous office expense 500
      Utilities and telephone 3,360
      Payroll taxes 3,600
      Depreciation To be calculated

      On March 20, Phillip moved his business out of the old offices at 1103 Allium Lane into a newly constructed and equipped office on Grove Street. Phillip sold the old office building and all its furnishings. Phillip's expenditures for the new office building are as follows:

      Date Acquired Asset Cost
      3/20 Land $ 300,000
      3/20 Office building 2,500,000
      3/20 Furniture 200,000
      4/1 Computer system 350,000
      6/1 Artwork 150,000

      Phillip computes his cost recovery allowance using MACRS. He would like to use the §179 immediate expensing, but he has elected to not claim any bonus depreciation. Phillip has never claimed §179 or bonus depreciation before. The assets Phillip sold on March 20 are as follows:

      Date Acquired Asset Sales Price Original Cost Accumulated Depreciation as of Beginning of the Year
      5/1/07 Office building $940,000 $900,000 $129,825
      5/1/07 Land 200,000 100,000 0
      7/1/07 Furniture 50,000 239,000 206,998
      8/13/09 Furniture 10,000 324,000 222,782
      4/12/10 Office equipment 100,000 120,000 67,524
      5/13/12 Computers $ 30,000 50,000 10,000

      Phillip has never sold any assets relating to his business before this transaction.

  1. The Dunphys sold 60 shares of Fizbo Corporation common stock on September 3, for $65 a share (minus a $50 total commission). The Dunphys purchased the stock on November 8, 2012, for $90 a share. They also sold a painting for $13,000 on March 1. Claire purchased the painting for $20,050 on September 1, 2006, as an investment.

  2. The Dunphys filed their 2012 federal, state, and local returns on April 13, 2013. They paid the following additional 2012 taxes with their returns: federal income taxes of $630, state income taxes of $250, and city income taxes of $75.

  3. The Dunphys made timely estimated federal income tax payments of $19,000 each quarter during 2013. They also made estimated state income tax payments of $1,000 each quarter and estimated city income tax payments of $300 each quarter. The Dunphys made all fourth-quarter payments on December 31, 2013. They would like to receive a refund for any overpayments.

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