In the Long-Run Framework, Budget Surpluses

question 64

Multiple Choice

In the long-run framework, budget surpluses:

• A)should be run whenever output dips below potential output.
• B)should never be run since they crowd out investment in the short run.
• C)are better than budget deficits over the long run because unlike budget deficits, they increase saving and investment.
• D)should be run on a permanent basis since they boost saving and investment and stimulate economic growth.

Understand the concept of mass customization and its benefits to production efficiency and customer satisfaction.

Identify various strategies for achieving competitive advantage, including service quality, customer service, and product innovation.

Recognize the relationship between operating efficiencies, productivity, and competitive advantage.

Define technology in the context of organizational operations and output transformation.

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Definitions:

Diminishing Returns

Diminishing returns, a concept in economics, occurs when adding an additional factor of production results in a lower increment of output, assuming other factors are constant.

Total Cost

The entire expense of production, incorporating both consistent and fluctuating costs.

Produce

Refers to agricultural products, especially fresh fruits and vegetables, created through farming.

Utility

Utility is a measure of satisfaction or happiness that consumers derive from consuming goods and services.