Nathan Drinks Three Cups of Coffee Per Day

question 156

Multiple Choice

Nathan drinks three cups of coffee per day.The marginal benefit that he enjoys from drinking the third cup is

• A) less than the marginal benefit that he receives from drinking the second cup.
• B) the same as the total benefit from drinking all three cups minus the total benefit of drinking the first two cups.
• C) both a and b.
• D) greater than the marginal benefit that he receives from drinking the second cup.
• E) none of the above.

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Definitions:

Accounts Receivable

Financial obligations of customers towards a company for delivered but unpaid goods or services.

Net Working Capital

A calculation of a firm's ability to cover its short-term obligations, determined by subtracting current liabilities from current assets.

Inventory

The total amount of goods and materials held in stock by a business or warehouse.

Depreciation

The systematic reduction of the recorded cost of a fixed asset over its useful life to reflect wear and tear or obsolescence.