Refer to the information provided in Figure 18.5 below to answer the questions that follow. Figure 18.5
-Refer to Figure 18.5. The domestic price of oil is $130 per barrel. This country imports 5 million barrels if the world price of oil is

Question

Refer to the information provided in Figure 18.5 below to answer the questions that follow.  Figure 18.5
-Refer to Figure 18.5. The domestic price of oil is $130 per barrel. This country imports 5 million barrels if the world price of oil is

Quizplus · Accepted Answer

If the world price of oil is $125, then the country's domestic price of oil is equal to the world price. Therefore, there is no need to import any oil and the quantity imported is zero. If the world price is below $125, then the country can import oil at a cheaper price and therefore imports more than 5 million barrels. If the world price is above $125, then the country can produce oil domestically at a cheaper price and therefore does not need to import as much as 5 million barrels.

Refer to the Information Provided in Figure 18