Reference: Ref 15-7 (Table: Oil Output) Refer to the Table

question 120

Multiple Choice

Reference: Ref 15-7 (Table: Oil Output) Refer to the table. If both countries abide by the cartel agreement (i.e., not cheat) :

• A) each country earns $78.
• B) each country earns $65.
• C) Iraq earns $89 and Iran earns $60.
• D) Iraq earns $60 and Iran earns $89.

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Definitions:

Government Issued

Refers to products or securities that are provided or sanctioned by a government body, such as bonds or legal tender.

Price System

An economic mechanism where prices determined by supply and demand allocate resources efficiently in a market economy.

Scarce Goods

Goods that are limited in supply in comparison to their demand, leading to economic decisions regarding their allocation.

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded, also known as the market-clearing price.