Using Marginal Analysis to Decide Whether to Consume an Additional

question 94

True/False

Using marginal analysis to decide whether to consume an additional slice of pizza requires making a comparison of the benefits and costs associated with the consumption of an additional slice of pizza.

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Definitions:

Money Market Instrument

Short-term financial instruments that are highly liquid and considered safe, such as treasury bills and certificates of deposit.

Preferred Stock

A class of ownership in a corporation with a fixed dividend, senior to common stock but junior to bonds in claim on assets and earnings.

Commercial Paper

Short-term unsecured promissory notes issued by companies to finance their short-term liabilities.

Bank Discount Yield

A measure of the annualized yield on a short-term, non-interest bearing security like a Treasury bill, calculated using the discount from face value and the time to maturity.