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Hey everyone.
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Today we're answering problem number 18 from chapter 10 of the principles from microeconomics ap textbook, which in essence asks us, why has opec, a very big oil organization, has been able to preserve its own reputation and continue to collude after so many years? so think about it in both economic terms and non -economic terms.
00:32
That would be my recommendation.
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Practically speaking, pragmatically speaking, opec is a producer of oil, and they help facilitate oil to countries.
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So what is something? oil alone, that is a reason, because first off, everyone needs it, and in the economy, it's a very, very valuable natural resource.
01:19
You could say valuable and important to.
01:24
Vital might be the best word.
01:27
Valuable natural resource.
01:32
And when every single country in this world, essentially, because trading and shipping, you know, somehow uses oil and every country needs oil, you know, to facilitate certain things.
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But not everyone can get it because opec controls it or is one of the controllers of it.
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And essentially when everyone wants something but not really, everyone gets it, they're willing to pay more.
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Everyone needs it, but not everyone can produce it.
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That's probably the biggest reason, in my opinion, but not everyone can produce it.
02:16
It's what, i mean, not anymore in 2019, but for the longest time was considered, you know, gold for venezuela.
02:23
You know, if you look at venezuela, it's a struggling economy without gold.
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Gold is, i mean, not gold, without oil.
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Oil is its gold.
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Can't produce it.
02:37
Or in the cases of countries like the united states, opec is vital because the united states has many environmental protections in place to its government.
02:48
So the politics alone of oil prevents large powerhouse nations from even getting it, such as the u .s...