A change in input prices has no impact on a firm’s budget line.

Your text identifies all of the following as reasons why unsustainable debt may occur EXCEPT

A) when countries are dependent on one or two key export commodities, and there is a sudden drop in the price of those commodities. B) when natural disasters occur. C) when civil conflicts are resolved and a peace dividend occurs. D) when there are corrupt politicians and practices. E) when government officials try to buy votes with unsustainable spending.

The cartel of oil-producing nations (OPEC) once controlled about 80% of the world petroleum market, but OPEC's market share has declined to about half of its former level. This outcome is a good example of how firms may have:

A) relatively high short-run monopoly power that strengthens in the long run. B) relatively high short-run monopoly power that declines in the long run. C) relatively low short-run monopoly power that strengthens in the long run. D) relatively low short-run monopoly power that declines in the long run.