Which of the following is the most effective way for businesses to take advantage of globalization?

• A. Limiting product offerings to local preferences only
• B. Avoiding foreign partnerships to reduce risk
• C. Expanding into international markets through exporting and importing
• D. Focusing solely on domestic production and sales

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of globalization in microeconomics, which refers to the increasing integration of markets and businesses across countries, allowing firms to access larger markets and resources.
2. Step 2: Analyze each option by considering how it aligns with the opportunities globalization provides. For example, limiting product offerings to local preferences only restricts market reach and does not leverage global demand.
3. Step 3: Evaluate the option of avoiding foreign partnerships. While it may reduce risk, it also limits access to foreign knowledge, resources, and market opportunities, which are key benefits of globalization.
4. Step 4: Consider the option of expanding into international markets through exporting and importing. This approach allows businesses to access new customers, diversify markets, and benefit from comparative advantages, which are central to globalization.
5. Step 5: Compare the option of focusing solely on domestic production and sales, which ignores the potential gains from global trade and market expansion, making it less effective in taking advantage of globalization.