The authors explain that the international copper cartel (CIPEC) has been largely ineffective in raising the price of copper in world markets, and the reason is mainly due to the relatively elastic demand for copper
Suppose the cartel recognized that there are multiple uses for copper, and some of the uses have few substitute products (e.g., copper electrical wire) while others have several close substitutes (e.g., copper water pipes). To increase profits, the cartel could raise the price of copper in the sub-markets with relatively inelastic demand. What else would the cartel have to do in order to make the cartel's action effective? A) The cartel would have to seek permission from the U.S. Department of Justice.
B) The cartel would have to get the cooperation of all other copper producers in order to raise the price by some positive amount.
C) The cartel would have to find a way to keep the buyers in the low-price market from reselling the copper to buyers in the high-price market.
D) none of the above
C
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The ratio of a country's exports to its total output (GNP or GDP)
A) is known as the index of openness. B) provides a rough measure of the importance of international trade to that economy. C) if calculated for the United States would be quite low. D) All of the above.
The attribute that distinguishes money from other assets is that only money
A) retains its value during times of inflation. B) is counted in determining the size of an individual's wealth. C) serves as a medium of exchange. D) may be used as collateral for a bank loan.