Brad Was Disabled for Part of the Year, and He

question 73

True/False

Brad was disabled for part of the year, and he received $11,500 of benefits from a disability insurance policy purchased by his employer. Assume that Brad was not previously taxed on the disability insurance premiums paid by his employer. Brad must include all $11,500 of benefits in his gross income because he was not taxed on the disability insurance premiums paid by his employer.

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Definitions:

Willingness to Pay

The maximum amount a consumer is prepared to spend for a good or service.

Baseball Game Ticket

A document or electronic card that grants the bearer entry to a baseball game.

Consumer Surplus

The distinction between the full amount consumers are willing and able to spend on a good or service and the actual sum paid.

Price Floor

A government or group-imposed price control or limit on how low a price can be charged for a product, above the equilibrium price.