The oil ministers of Brazil and Iran have agreed to restrict
their output in order to raise prices and increase profits. The
countries have to choices: to stick to their collusive agreement or
to cheat. Their payoff matrix is in billions of dollars is as
follows:
Iran
Brazil
Collude
Cheat
Collude
10,10
5,15
Collude
15,5
7,7
(a) What is a dominant strategy? Does Saudi Arabia have a
dominant strategy in this game? Explain your answer.
(b) Which outcome maximizes joint...
There are two oil producers, Saudi Arabia and Iran. The market
price will be $60/barrel if the total volume of sales is 9 million
barrels daily, $50 if the total volume of sales is 11 million
barrels daily, and $35 if the total volume of sales is 13 million
barrels daily. Saudi Arabia has two strategies; either produce 8
million barrels daily or 6 million. Iran has two strategies; either
produce 3 million barrels daily or 5 million. Assume for...
Iran supplies 10% of the world market in Crude oil. The market
demand for Crude is price-inelastic, with εCC = -0.25. The
Ayatollah has come up with a new idea – “we’ll withhold half of our
oil from the market, raise price and get more revenue, given that
demand is so inelastic. You are the economic advisor to the
Ayatollah. a)Is the Ayatollah right? b)Explain your answer to
(a).
Major geo-political events such as the Iran-Iraq war, for
example can cause sudden disruptions to oil supplies. What are two
strategies that governments or firms can use to reduce the economic
risks that these disruptions would otherwise pose to their
businesses or societies?
Explain in words how each of the strategies you
mentioned above accomplish their goal of risk reduction (i.e., how
do they reduce the risk from shocks to oil supplies?).
If the U.S. directed airstrikes against Iran, shutting down
Iranian oil exports, how would this impact the following items and
explain?
a) Would the world demand curve for crude oil: Shift to the
right, shift to the left, or stay the same
b) World supply curve for crude oil: Shift to the right, shift
to the left, or stay the same
c) U.S. demand curve for crude oil: Shift to the right, shift to
the left, or stay the same...
discuss the relationship between your own opinions and the facts
and opinions in the sources you will use in your research paper.
Should you put any of your opinions in a research paper? If so, how
should the sources relate to your own opinions? Which should seem
to control the argument of your paper: your opinions or those of
your sources?
a. Suppose a revolution in Iran results in a significant
reduction in the world’s supply of oil.
Instructions: Drag the appropriate line in the
correct direction to show the short-run effect on the AD/AS
model.
This will:
reduce output and raise the price level.
increase output and raise the price level.
increase output and lower the price level.
reduce output and lower the price level.
b. Suppose the government takes no action to help the economy.
Eventually, the price...
Match the conflict scenario to the type of conflict that fits
best (relationship or task conflict).
- A.
B.
Ben and Jerry are two members of a healthcare team who are
working with Patient Smith on recovering from an auto accident.
Ben, the nurse practitioner, believes Mr. Smith should take his
pain medication after his physical therapy session, and Jerry, his
physical therapist, believes the patient should take his pain
medication before his...