The Benefit a Consumer Acquires from Consuming a Unit of a Good

question 2

Multiple Choice

The benefit a consumer acquires from consuming a unit of a good is equal to ________.

• A) the willingness to pay minus the cost of production
• B) the price that a consumer is willing to pay
• C) the profit associated with the good
• D) the area above the demand curve

---

Definitions:

Working Capital

A measure of a company's liquidity, operational efficiency, and short-term financial health, calculated as current assets minus current liabilities.

Current Ratio

A financial indicator used to assess whether a company can handle its obligations in the short term, calculated by the ratio of current assets to current liabilities.

Acid-Test Ratio

A liquidity metric that measures a company's ability to pay off its current liabilities with its quick assets without relying on inventory sales.

Times Interest Earned

A financial metric that measures a company's ability to meet its debt obligations by comparing its interest expenses to its earnings before interest and taxes (EBIT).