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

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Chapter1: Making Economics Decisions
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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
Transcribed Image Text: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
2A.
he Trump administration will not impose any limits on perchlorate, a toxic chemical compound that
contaminates 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 that
required the agency to establish a safe drinking-water standard for the chemical by the end of June. The
policy, which acknowledges that exposure to high levels of perchlorate can cause I.Q. damage but opts
nevertheless not to limit it, could also set a precedent for the regulation of other chemicals, people familiar
with the matter said.
E.P.A. intends in the coming days to send a federal register notice to the White House for review that will
declare 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 APPLY
Over time, bacteria can break perchlorate down into harmless bacteria, but if perchlorate is emitted
faster than this breakdown occurs, it will accumulate. The waste absorption capacity for
perchlorate is rival, since one corporations use of the absorption capacity leaves less for other. This
problem can therefore be described as the tragedy of an open access regime. Laws that limit
perchlorate emissions could make the waste absorption capacity excludable.
Pollution is a negative externality of perchlorate production and use, and by definition externalities
should be ignored
All water pollution is inefficient.
Water is essential, and its marginal value increases rapidly with decreasing supply. Allowing
perchlorate 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" to
regulate the chemical, this means marginal benefits of perchlorate production (and unsafe
disposal) exceed the marginal costs, so reducing pollution would be economically inefficient.
According to mainstream economic theory, imposing a water pollution tax on perchlorate
producing companies equal to the monetary value of the ecological and health costs would be
more efficient than a ban on perchlorate.
Household water markets are highly competitive. If one source of water is polluted, households
can just buy their tap water from another company.
Drinking water is a non-rival and non-excludable public gooD
Transcribed Image Text:2A. he Trump administration will not impose any limits on perchlorate, a toxic chemical compound that contaminates 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 that required the agency to establish a safe drinking-water standard for the chemical by the end of June. The policy, which acknowledges that exposure to high levels of perchlorate can cause I.Q. damage but opts nevertheless not to limit it, could also set a precedent for the regulation of other chemicals, people familiar with the matter said. E.P.A. intends in the coming days to send a federal register notice to the White House for review that will declare 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 APPLY Over time, bacteria can break perchlorate down into harmless bacteria, but if perchlorate is emitted faster than this breakdown occurs, it will accumulate. The waste absorption capacity for perchlorate is rival, since one corporations use of the absorption capacity leaves less for other. This problem can therefore be described as the tragedy of an open access regime. Laws that limit perchlorate emissions could make the waste absorption capacity excludable. Pollution is a negative externality of perchlorate production and use, and by definition externalities should be ignored All water pollution is inefficient. Water is essential, and its marginal value increases rapidly with decreasing supply. Allowing perchlorate 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" to regulate the chemical, this means marginal benefits of perchlorate production (and unsafe disposal) exceed the marginal costs, so reducing pollution would be economically inefficient. According to mainstream economic theory, imposing a water pollution tax on perchlorate producing companies equal to the monetary value of the ecological and health costs would be more efficient than a ban on perchlorate. Household water markets are highly competitive. If one source of water is polluted, households can just buy their tap water from another company. Drinking water is a non-rival and non-excludable public gooD
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