The Organization of Petroleum Exporting Countries (OPEC)behaves in Many Ways

question 17

Multiple Choice

The Organization of Petroleum Exporting Countries (OPEC) behaves in many ways like an international cartel.If the cartel were to hire a consulting firm to monitor the production rates of member countries,the economic reason for this monitoring would be to

• A) make sure that each member country is producing at an output level at which price equals marginal cost.
• B) make sure all the member countries produce at least their quotas,so that there will be no oil shortage.
• C) detect those member countries that are reducing prices by producing more than their assigned quotas.
• D) make sure that the marginal revenue for the last barrel of oil sold by each member country is less than its price.
• E) make sure competition is increased.

Distinguish between the accounting and legal entity concepts of corporations.

Understand the role of retained earnings in financial reporting and the process of closing entries.

Identify the differences in chartering of businesses under state and federal laws.

Understand the implications of double taxation on corporations.