List and Explain Three Strategic Motives Why Firms Could Become

question 53

Essay

List and explain three strategic motives why firms could become multinationals and give an example of each.

Understand the basic concept and purpose of emissions taxes and their role in reducing pollution.

Analyze the effect of setting emissions taxes lower or higher than the optimal level on pollution.

Recognize the adoption and implications of an emissions tax by the government.

Compare the effectiveness of taxes and environmental standards in controlling pollution.

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Definitions:

Government Activities

Actions and operations conducted by the government including lawmaking, regulation, and public services.

Externality Rights

The rights pertaining to external effects of transactions, that affect third parties not directly involved in the economic transaction.

Government Imposed Taxes

Charges levied by the government on individuals, goods, services, or transactions to fund public expenditures.

Marginal Social Cost

The total cost to society of producing an additional unit of a product, including both the private cost and any external costs.