When the Nations That Constitute the Organization of the Petroleum

question 137

Multiple Choice

When the nations that constitute the Organization of the Petroleum Exporting Countries (OPEC) restrict the supply of oil to increase their profits,the oil market:

• A) achieves an efficient outcome because profits increase.
• B) achieves an equitable outcome because the nations with oil resources receive the profits commensurate with that resource.
• C) fails because there is no longer an efficient allocation of resources.
• D) fails because there is no longer an equitable allocation of resources.

Recognize the concept of natural monopoly and the conditions under which it occurs.

Analyze the relationship between price elasticity of demand and monopolistic pricing strategies.

Calculate the optimal price and output for a monopolist under various cost and demand conditions.

Understand the implications of monopolies on economic efficiency and consumer surplus.

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Definitions:

Great Plains

A vast, flat area of land covering parts of the U.S. and Canada, known for its grasslands and significant agricultural output.

Exodusters

African Americans who migrated from states along the Mississippi River to Kansas in the late nineteenth century, seeking political and economic freedom.

Kansas Farmers' Alliance

An organized agrarian economic movement among farmers in Kansas in the late 19th century that worked for their mutual benefit and protection.

Time Zones

Regions of the globe that have been divided into standardized time areas, each typically one hour apart, to facilitate uniform time-keeping.