Ridge Is the Manager of a Motel

question 7

Multiple Choice

Ridge is the manager of a motel. As a condition of his employment, Ridge is required to live in a room on the premises so that he would be there in case of emergencies. Ridge considered this a fringe benefit, since he would otherwise be required to pay $800 per month rent. The room that Ridge occupied normally rented for $70 per night, or $2,100 per month. On the average, 90% of the motel rooms were occupied. As a result of this rent-free use of a room, Ridge is required to include in gross income.

• A) $0.
• B) $2,100 per month.
• C) $800 per month.
• D) $1,890 ($2,100 × .90).
• E) None of the above.

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Definitions:

Mental Processes

Internal cognitive operations that include thinking, reasoning, problem-solving, and remembering that enable individuals to understand and interact with the world.

1960s

A decade characterized by significant social, political, and cultural changes worldwide.

Behaviorism

A psychological approach that emphasizes the study of observable behaviors and the role of environmental forces in shaping behavior.

Conditioned

The learning process in which a response becomes associated with a previously unrelated stimulus.