The Concept of Utility

question 40

Multiple Choice

The concept of utility:

• A) cannot be used to explain why people are charitable.
• B) cannot be used to explain why people are altruistic.
• C) cannot be used to explain why people are selfish.
• D) None of these is true.

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Definitions:

Current Ratio

A financial metric indicating a firm's capability to settle short-term debts due within a year, derived by dividing current assets by current liabilities.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or the normal operating cycle, whichever is longer.

Short-Term Solvency

A financial metric indicating a company's ability to meet its short-term obligations, highlighting liquidity.

Current Ratio

A financial ratio indicating a firm's capacity to meet its short-term liabilities using its existing assets.