Table 112 Suppose OPEC Has Only Two Producers, Saudi Arabia

question 126

Multiple Choice

Table 11.2 Suppose OPEC has only two producers, Saudi Arabia and Nigeria.Saudi Arabia has far more oil reserves and is the lower cost producer compared to Nigeria.The payoff matrix in Table 11.2 shows the profits earned per day by each country.'Low output' corresponds to producing the OPEC assigned quota and 'high output' corresponds to producing the maximum capacity beyond the assigned quota.
-Refer to Table 11.2.The Nash equilibrium in this game is

• A)In the Nash equilibrium, both Saudi Arabia and Nigeria produce a low output and earn a profit of $100 million and $20 million respectively.
• B)In the Nash equilibrium, both Saudi Arabia and Nigeria produce a high output and earn a profit of $60 million and $20 million respectively.
• C)In the Nash equilibrium, Saudi Arabia produces a low output and earns a profit of $80 million, and Nigeria produces a high output and earns a profit of $30 million.
• D)There is no Nash equilibrium.

---

Definitions:

Need for Achievement

A psychological trait that drives individuals to succeed in their goals, often pushing them to overcome challenges and achieve high standards.

Physical Activity

Physical activity refers to any bodily movement produced by skeletal muscles that requires energy expenditure, including activities undertaken while working, playing, carrying out household chores, traveling, and engaging in recreational pursuits.

Attention

The cognitive process of selectively concentrating on one aspect of the environment while ignoring other stimuli.

External Locus of Control

The belief that one's successes or failures result from external factors beyond one's control, as opposed to one's own efforts.