From an Economic Perspective, When a Consumer Decides to Buy

question 231

Multiple Choice

From an economic perspective, when a consumer decides to buy more life insurance, the consumer has most likely concluded that the

• A) marginal cost of more insurance coverage is negative.
• B) marginal benefit of more insurance coverage is greater than zero.
• C) marginal benefit of more insurance coverage is greater than the marginal cost.
• D) marginal cost of more insurance coverage is equal to the payment for the extra coverage.

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Definitions:

Accrued Liabilities

Expenses that have been incurred but not yet paid or recorded through a standard accounting transaction, representing future cash outflows.

Decrease Cash

Decrease cash refers to a reduction in the amount of money and cash equivalents available in a company, which can result from paying expenses, purchasing assets, or distributing dividends.

Inventory Method

An accounting approach used to value and manage the inventory a business holds, affecting cost of goods sold and ending inventory.

Accounts Payable Turnover Ratio

A financial efficiency ratio that measures how many times a company pays off its suppliers during a specific period.