Brady Owns a Beachfront Lot with a Small House

question 148

Multiple Choice

Brady owns a beachfront lot with a small house.During hurricanes,he refuses to leave and afterward he applies for government assistance to rebuild and files insurance claims for damages.By doing so,Brady is

• A) increasing his economic surplus without harm to others.
• B) imposing an external cost on himself.
• C) imposing an external cost on rescue workers,taxpayers,and insurance policy holders.
• D) treating his property as common property.
• E) in a positional arms race.

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Definitions:

Willful Misconduct

Intentional wrongdoing or a reckless disregard for the safety and rights of others.

Internal Revenue Code

The comprehensive set of tax laws in the United States that govern federal tax obligations.

Securities Act of 1933

A U.S. federal law enacted to ensure more transparency in financial statements and to prevent fraud in the sale of securities, requiring that investors receive significant information about securities being offered for public sale.

Material Fact

An important fact that could influence a decision in a contract, negotiation, or legal case; its omission or misrepresentation could constitute fraud.