OPEC periodically meets to agree to restrict the cartel's oil output, and yet almost every member of OPEC produces more than its own output quota. This suggests that OPEC has
A) a cooperative equilibrium.
B) a noncooperative equilibrium.
C) new potential entrants.
D) a threat of substitute goods.
Answer: B
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Which of the following is an example of a topic studied by microeconomists?
A) Price determination by a firm B) Interest rate determination C) Measures to combat inflation D) National income calculations
The International Monetary Fund, one of the Bretton Woods Institutions,
(a) was meant to provide short-term credit. (b) was meant to provide long-term credit. (c) was meant to provide both short- and long-term credit. (d) was not meant to provide credit.
Q: How many economists does it take to screw in a light bulb? A: None. If the light bulb really needed changing, market forces would have already caused it to happen. This joke represents the view of
A) classical economists. B) Keynesian economists. C) economists who conclude that money illusion is widespread. D) economists who conclude that wages and prices are inflexible.
The owners of a firm are earning economic profit if
a. return on their capital is lower than the opportunity cost of employing that capital in their industry. b. their total revenues exceed the monetary payments to labor and other resources in the long run after all plant size adjustments are made. c. price exceeds average variable costs at the shutdown point. d. they are earning a return on their capital that is higher than what can generally be earned in other markets.