briefly answer the following questions, cite the sources you used.
1) What strategies did Standard Oil use to obtain a 90% share of oil refining in the US? Were these strategies illegal then? Were these tactics illegal then? Would they be illegal now?
3) High taxes on imports (high tariffs) were frequently called by their opponents the “Mothers of Trusts.” Why is it certain that high tariffs were not important in the formation of the Standard Oil monopoly?
4) Why has the oil producing industry has greater “common pool” problems then the oil producing industry has had in almost all other countries? Why would the common pool problem be less in producing oil ”tight oil” deposits (such as shale) than in oil deposits in permeable rocks ? Why is he common pool problem more important in the US than in almost all other oil producing countries? Why have purely How have the governments in the US acted to mitigate “common pool” problems?
5) How did regulations adopted by state governments to lessen common pool problems lead to a crude oil cartel operated by an Interstate Oil Compact? How and why was prorationing applied so as to increase the profits of small oil producing companies more than it increased the profits of large oil companies?
6) Did the Interstate Oil Compact increase the price of crude oil – by directly setting prices and or by limiting oil production and or by minimizing the cost of producing crude oil ? How did the Federal Government act in 1933, 1935 and 1959 to aid the operation of this cartel? Why did the Interstate Oil Compact fail to maximize the profits of oil producers?
8) What tests can be applied to discover whether oil futures markets are efficient markets? Why would one year forward oil be usually priced higher than spot oil for immediate delivery if oil reserves available at any given price were believed to be limited?
9) What evidence is there that the OPEC oil cartel does not control the production of crude oil in its member countries? Show graphically that the low gasoline prices and large use of oil to power electricity generation in Saudi Arabia is evidence that the international price of oil would be higher if there were more oil exporters.
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