Ridge Is the Manager of a Motel

question 31

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

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Definitions:

Begging the Question

Begging the question is a logical fallacy where the conclusion of an argument is assumed in one of its premises, essentially arguing in a circle without providing proof.

Independent Premises

Arguments or statements that support a conclusion but do not rely on each other to do so.

Fallacy of Division

This logical fallacy assumes that what is true of a whole must also be true of its parts. For example, assuming that because a car is heavy, each part of the car must also be heavy.

Monopoly

A market structure characterized by a single seller facing little to no competition, often resulting in high prices and limited choices for consumers.