Final answer:
Allocating common fixed expenses is a strategic decision that impacts a company's understanding of profitability. It mirrors broader economic decisions about consumption, savings, and government spending. These principles are applicable to various economic situations, from personal budgeting to international foreign aid and discussions about public goods and private property.
Step-by-step explanation:
Whether an intern's decision to allocate common fixed expenses to different segments such as commercial and residential is appropriate depends on the accounting practices and the strategic goals of the company. Companies often allocate fixed expenses to better understand the profitability of different segments and make informed decisions. For instance, knowing the full cost of operating a segment can shed light on areas where efficiency can be improved or help determine pricing strategies. However, this could complicate the accounting process, and there might be disagreement on the allocation methods used.
Similar principles apply to broader economic questions. Individuals and households make decisions based on their disposable income, balancing consumption and savings. Just as households allocate fixed expenses and discretionary funds, a government must make decisions about spending, such as the amount allocated to foreign aid and how to balance public goods against private property rights.
Ultimately, the fairness and effectiveness of markets, the impact of mergers on cost savings and market positions, and the government's role in property rights are all complex issues that intersect with these basic economic principles of allocation and opportunity cost.