Title: The organization of petroleum exporting countries (opec): A slick industry

Part 2 - Analyzing the Economics Behind OPEC Directions: Answer the following questions. Use a separate sheet of paper, if necessary. Then, as a class, discuss your answers. 1. When OPEC limited production in the 1970s, in which direction did the supply curve shift? What happened to both price and quantity? Using this information, if the United States were to become more dependent on Middle Eastern oil because of cur- rent lower prices, what could happen in the U.S. economy? 2. Production Cost of Oil of Production Saudi Arabia 1,000,000 barrels $1.00/barrel Gabon 500,000 barrels $13.50/barrel 58 Casebook Chapter 24 If OPEC were to cut back production 10 percent to hold prices at $15 a barrel, how much money would each nation make? If membership in OPEC cost $750,000 a year, would Gabon feel that this was unfair? Why or why not? 3. Saudi Arabia cut the price of oil in 1986. Why did that spark global economic growth