Russia, Iran and Qatar made the first serious moves in October 2008 toward forming an OPEC-style cartel for natural gas. Each of the countries can comply with the cartel agreement or to cheat on the cartel agreement
If all countries comply, the economic profit for each will be $140 million. If one country cheats, that country earns $200 million in economic profit and the other countries will have economic losses of $10 million. If all countries cheat, they break even. What are the strategies in this game? A) Comply with the cartel agreement or to cheat on the cartel agreement.
B) Comply with the agreement and earn $140 million in profit.
C) Cheat on the cartel agreement and earn -$10 million in profits.
D) Earn between $140 and $200 million in profits.
A
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When the price of a product exceeds the marginal cost of producing it, producers have a
A) consumer surplus. B) producer surplus. C) consumer shortage. D) producer shortage. E) deadweight surplus.
The foreign exchange market
A) is a government-run market where foreign currencies are traded. B) is a bank-owned market through which people buy and sell currencies. C) refers to the entire array of institutions through which people buy and sell currencies. D) an open market run by the Federal Reserve through which banks buy and sell currencies.