2B. PICK BEST ANSWERMany of the world's major oil producers agreed on Saturday to extend the record oil production cuts thathave helped bolster oil prices since their collapse in April in the depths of the coronavirus pandemic.Oil ministers from the Organization of the Petroleum Exporting Countries, as well as other producers ledby Russia, met by video conference on Saturday and reached an agreement to continue cutting 9.7 millionbarrels a day – or about 10 percent of global output in normal times – through July, OPEC said in anews release.Which of the following is an unlikely outcome if the agreement works?Higher oil prices will stimulate investment in alternative energyWhen OPEC and Russia collaborate they have some market power and are not simply price takers.However, setting prices is more difficult for oligopolies than monopolies.OPEC's marginal costs of production will equal the market priceGiven the inelastic demand for oil, higher prices will lead to a small decrease in demandRevenue will increase as output falls2C. PICK BEST ANSWERSaudi Arabia's economy is able to extract oil at a lower cost than any other country. Based only on theinformation provided here, Saudi Arabia must have_in oil production.A comparative advantagePerfect competitionA monopolyAn absolute advantageA relative advantage 2A.he Trump administration will not impose any limits on perchlorate, a toxic chemical compound thatcontaminates water and has been linked to fetal and infant brain damage.The decision by Andrew Wheeler, the administrator of the E.P.A, appears to defy a court order thatrequired the agency to establish a safe drinking-water standard for the chemical by the end of June. Thepolicy, which acknowledges that exposure to high levels of perchlorate can cause I.Q. damage but optsnevertheless not to limit it, could also set a precedent for the regulation of other chemicals, people familiarwith the matter said.E.P.A. intends in the coming days to send a federal register notice to the White House for review that willdeclare it is "not in the public interest" to regulate the chemical.Which of the following statements about water and water pollution are true?PICK ALL THAT APPLYOver time, bacteria can break perchlorate down into harmless bacteria, but if perchlorate is emittedfaster than this breakdown occurs, it will accumulate. The waste absorption capacity forperchlorate is rival, since one corporations use of the absorption capacity leaves less for other. Thisproblem can therefore be described as the tragedy of an open access regime. Laws that limitperchlorate emissions could make the waste absorption capacity excludable.Pollution is a negative externality of perchlorate production and use, and by definition externalitiesshould be ignoredAll water pollution is inefficient.Water is essential, and its marginal value increases rapidly with decreasing supply. Allowingperchlorate into the water supply will increase the marginal value of healthy drinking water.If the EPA uses sound economic reasoning, when it states that it is "not in the public interest" toregulate the chemical, this means marginal benefits of perchlorate production (and unsafedisposal) exceed the marginal costs, so reducing pollution would be economically inefficient.According to mainstream economic theory, imposing a water pollution tax on perchlorateproducing companies equal to the monetary value of the ecological and health costs would bemore efficient than a ban on perchlorate.Household water markets are highly competitive. If one source of water is polluted, householdscan just buy their tap water from another company.Drinking water is a non-rival and non-excludable public gooD

Option (c) is unlikely since MC is never going to be equal to price. OPEC countries control 75…

2B. PICK BEST ANSWER Many of the world's major oil producers agreed on Saturday to extend the record oil production cuts that have helped bolster oil prices since their collapse in April in the depths of the coronavirus pandemic. Oil ministers from the Organization of the Petroleum Exporting Countries, as well as other producers led by Russia, met by video conference on Saturday and reached an agreement to continue cutting 9.7 million barrels a day – or about 10 percent of global output in normal times – through July, OPEC said in a news release. Which of the following is an unlikely outcome if the agreement works? Higher oil prices will stimulate investment in alternative energy When OPEC and Russia collaborate they have some market power and are not simply price takers. However, setting prices is more difficult for oligopolies than monopolies. OPEC's marginal costs of production will equal the market price Given the inelastic demand for oil, higher prices will lead to a small decrease in demand Revenue will increase as output falls 2C. PICK BEST ANSWER Saudi Arabia's economy is able to extract oil at a lower cost than any other country. Based only on the information provided here, Saudi Arabia must have _in oil production. A comparative advantage Perfect competition A monopoly An absolute advantage A relative advantage

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC