When Actual Performance and Standards Differ, What Would Be the Appropriate

question 63

Multiple Choice

When actual performance and standards differ, what would be the appropriate corrective action?

• A) Change the standard.
• B) Improve performance.
• C) Change the way performance is measured.
• D) Any of the above could be appropriate.

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Definitions:

Deadweight Loss

Deadweight loss represents the efficiency lost to an economy because of market inefficiencies or interventions, where resources are not allocated optimally.

Consumer Surplus

The misalignment between the price consumers are willing to allocate for a good or service and the price they actually allocate.

Producer Surplus

The difference between what producers are willing to sell a good for and the actual market price they receive, representing the profit producers make.

Tax

A compulsory charge by the government on individuals or entities' income, property, or goods, used to fund public services and government obligations.