The Diagram Below Illustrates the International Tin Market

question 3

Multiple Choice

The diagram below illustrates the international tin market. Assume that the producing and consuming countries establish an international commodity agreement under which the target price of tin is $5 per pound.
Figure 7.2. Defending the Target Price in Face of Changing Supply Conditions
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-Consider Figure 7.2.Assume there exists a cartel of several producers that is maximizing total profit.If one producer cheats on the cartel agreement by decreasing its price and increasing its output, then the rational action of the other producers is to

• A) increase their price in order to regain sacrificed profits.
• B) decrease their price as well.
• C) continue selling at the agreed-upon price.
• D) give the product away for free.

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Definitions:

Minimum Wage Rates

The lowest legal hourly pay that employers can give to workers, as set by government regulations.

Overtime Payments

Compensation paid to employees for working beyond their standard hours, typically at a higher rate.

Compensable Factors

Elements of a job that are used to determine its value and appropriate compensation, such as skills required, effort, responsibility, and working conditions.

Job Evaluation

A systematic process used to determine the relative worth of jobs within an organization by analyzing their duties, responsibilities, and requirements.