A Global Strategy

question 57

Multiple Choice

A global strategy:

• A) is easy to manage because of common operating decisions across borders.
• B) achieves efficient operations without sharing resources across country boundaries.
• C) increases risk because decision making is centralized at the home office.
• D) lacks responsiveness to local markets.

Discuss the role of government intervention in addressing externalities and achieving social optimum.

Explain the difference between marginal social benefit (MSB) and marginal social cost (MSC).

Analyze scenarios to determine socially optimal levels of public goods and externalities.

Describe the concept of a Pigouvian subsidy and its application for external benefits.

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Definitions:

Current Liabilities

Obligations a company must fulfill within the forthcoming fiscal year, including debts, accounts payable, and other short-term financial responsibilities.

Balance Sheet

A balance sheet is a financial statement that presents a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Periodic Inventory System

An inventory management method where updates to inventory records are made at specific intervals, not continuously.

Inventory Account

An account on the balance sheet representing the total cost of goods a company intends to sell to customers, including raw materials, work-in-progress, and finished goods.