Randy Is the Manager of a Motel

question 82

Multiple Choice

Randy is the manager of a motel. As a condition of his employment, Randy is required to live in a room on the premises so that he would be there in case of emergencies. Randy considered this a fringe benefit, since he would otherwise be required to pay $800 per month rent. The room that Randy 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, Randy is required to include in gross income.

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

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Definitions:

Utilitarianism

An ethical theory that posits the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.

Welfare

Governmental provision of economic assistance to individuals in need.

Well-being

A state of being comfortable, healthy, or happy, often considered holistically including physical, mental, and social aspects.

Political Causes

Advocacy or movements aimed at influencing political policies or systems.