Suppose That the Marginal Benefit of Having a Security Guard

question 78

Multiple Choice

Suppose that the marginal benefit of having a security guard at the airport is MB₁,at the bank is MB₂,and at the mall is MB₃.The marginal cost of assigning security guard is the same for all three places,and it is represented by MC₂.
The marginal cost curves are upward-sloping because the first guards assigned are the guards with the lowest opportunity costs for performing this task.This is referred to as the

• A) law of demand.
• B) law of supply.
• C) law of diminishing marginal utility.
• D) low-hanging-fruit principle.

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Definitions:

Debt

Money owed by one party to another under the condition of repayment, often including interest charges.

Profitability

The capability of a business to generate earnings greater than its expenses over a specific period, resulting in a profit.

Liabilities To Stockholders' Equity

Liabilities to Stockholders' Equity ratio indicates the financial leverage of a company, comparing the total liabilities to the total stockholders' equity to assess financial health.

Profitability

A measure of how much profit a business generates compared to its size, sales, or assets.