workers were over 5 times more productive than the global average (because of their advanced industrial sector‚ which accounts for the bulk of energy usage). The fall of the dollar U.S. economic policies had an important effect on the crisis. While the OPEC boycott was an immediate trigger‚ historians increasingly see the crisis as being rooted in American economic policies. Oil‚ especially from the Middle East‚ was paid for in United States dollars‚ at prices fixed in dollars. U.S. President Richard
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have to pay more on it. More frightening still‚ this situation may get worse before it come back to normal. No one can exactly predict when the pendulum will soon swing back again since all uncertain factors existing. From the supply side of view‚ the OPEC is the main producer‚ being prepared to add or subtract production to balance demand. Moreover‚ Russia is another major producer of oil in the world. They usually produce more when demand more and subtract when demand reduce to control the price of
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PRINCIPLES OF ECONOMICS Assignment Group members Nguyen Dat Anh Ho Ngoc Son Nguyen Thai Ha Nguyen Thi Huyen Trang Luyen Trung Kien Article’s link: http://news.bbc.co.uk/2/hi/7048600.stm Wednesday‚ 2 January 2008‚ 22:36 GMT What is driving oil prices so high? Oil prices have hit a record high at $100 a barrel. Prices have doubled from the rates seen in January 2007 and more than quadrupled since 2002. What factors are causing this unremitting increase and what are the likely consequences
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monopoly. Collaboration * When two or more oligopolies agree to fix prices or take part in anti-competitive behavior‚ they form a collusive oligopoly. They agreement can be formal or informal. * A formal agreement is a cartel and is generally illegal. OPEC is a legal cartel but it’s signed between countries and not firms. * In an informal agreement‚ the firms behave as a monopoly and choose the output that maximizes output. The diagram would be like the monopoly profit maximize. * Collaborations
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There are various types of market structures but the most important of all is the oligopolistic market structure. An oligopoly is when a market is dominated by relatively few large firms. An example of an oligopolistic market structure is commercial banking and the newspaper industry. One of the other market structures is Perfect Competition (PC). The way that firms in perfect competition set the price of their products is through the MC=MR condition for profit maximization and at the same time
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illustrate this we need to look no further than the relations between Saudi Arabia and the other OPEC members‚ starting from the 1980s‚ through the oil crisis of in the 90s and up until this point. This will allow us to take a peek at the “game theory” behind political decisions in a context of a repeated game‚ the consequences of mistrust and miscommunication and will show us when actors can get better results. OPEC accounts for about 40% of the world’s oil production with Saudi Arabia‚ responsible for 13%
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Article Analysis – Venezuela food shortage. Title: Venezuela food shortages: ‘No one can explain why a rich country has no food.’ Author: Journalist Virginia Lopez. Date: Thursday 26th September 2013. Source: Guardian (online article.) Summary of points raised: The article highlights that it is possible for a rich country producing a sufficient amount of oil‚ to have food shortages. This is reinforced by economist Asdrubal Oliveros who claims‚ “Oil production has decreased‚” there has also
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in Case Study 9-3‚ both may grossly overestimate the market power of the largest firms in the industry. Discussion Questions: 8 A cartel is a group of firms that behave as a single firm. All decisions are taken jointly in a manner that maximizes profit for the entire group. This is how OPEC works. The Organization of the Petroleum Exporting Countries (OPEC) consists of 12 oil producing and exporting countries‚ spread over America‚ Asia and Africa. The members are Algeria‚ Angola‚ Ecuador‚ the
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1. Oil is a commodity good which has no product differentiation. Thus the price is quite the same around the world. The supply of oil is abundant but many major oil-rich countries set up the group‚ OPEC‚ and act as monopoly. OPEC can set output and then play a vital role in world oil price. World demand of oil is increasing especially in non-oecd countries although there are alternative resources. Thus‚ as long as there is demand‚ the price will continue to go up. 2. The bases of competitive advantages
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Your Name:_________________________________________ (Please keep your completed study guide to study for the Final Exam) # | Term | 1 | Price Ceiling | 2 | Sherman Act | 3 | Middlemen | 4 | Clayton Act | 5 | Entrepreneur | 6 | Cartel | 7 | Federal Trade Commission Act | 8 | Speculators | 9 | Price Searcher | 10 | Hedge | 11 | Monopoly | 12 | Competition | 13 | Price Floor | 14 | Tariff | 15 | Rent Seeking | 16 | Support Price | 17 | Monopsony | 18 | Residual
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