The Difference Between a Firm's Total Revenue and What Must

question 20

Multiple Choice

The difference between a firm's total revenue and what must be paid to attract resources from their best alternative use is called

• A)total revenue
• B)utility
• C)economic profit
• D)cost
• E)production efficiency

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Definitions:

Treasury Bills

Short-term government securities issued at a discount from their face value, maturing in a year or less.

Low Default Risk

A classification for bonds or other forms of debt that are deemed to have a minimal chance of the issuer failing to make the required payments.

Money Market

The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities are traded, intended for short-term borrowing and lending.

Transaction Motive

The need to hold cash to satisfy normal disbursement and collection activities associated with a firm’s ongoing operations.