Harold Biggs Is Provided with $200,000 Coverage Under His Employer's

question 84

Multiple Choice

Harold Biggs is provided with $200,000 coverage under his employer's group-term life insurance plan. Which of the following statements is true?

• A) The value of $50,000 coverage is included in Harold's gross income.
• B) The value of $150,000 coverage is included in Harold's gross income.
• C) The value of $200,000 coverage is included in Harold's gross income.
• D) Harold's life insurance coverage is a nontaxable fringe benefit.

---

Definitions:

Free Rider Problem

The issue arising when individuals benefit from resources, goods, or services without paying for them, which can lead to under-provision of those goods or services.

Public Goods

Non-excludable and non-rivalrous products or services that are accessible to all members of a society, such as public parks or national defense.

Common Resources

Goods that are non-excludable and rivalrous, where usage by one person diminishes others' ability to use them, often leading to overuse.

Rival In Consumption

A characteristic of a good or service that means its use or consumption by one individual prevents simultaneous use or consumption by other individuals.