Managers May Intentionally Build Slack into the Budget

question 164

Multiple Choice

Managers may intentionally build slack into the budget

• A)because of uncertainty about the future.
• B)to make their performance look better.
• C)to have the resources they need in the event of budget cuts.
• D)because of all of the above.

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Definitions:

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive, measured above the supply curve.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, reaching a state of balance where there are no surplus or shortage.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, reflecting gains from trade.

Price Ceiling

A government-imposed limit on the maximum price that can be charged for a product or service.