Refer to the information provided in Figure 20.5 below to answer the question(s) that follow. Figure 20.5
-Refer to Figure 20.5. The domestic price of oil is $130 per barrel. If the world price of oil is $135 per barrel, this country will
A) import 23 million barrels.
B) import 9 million barrels.
C) export 5 million barrels.
D) export 14 million barrels.

Question

Refer to the information provided in Figure 20.5 below to answer the question(s) that follow.  Figure 20.5
-Refer to Figure 20.5. The domestic price of oil is $130 per barrel. If the world price of oil is $135 per barrel, this country will
A) import 23 million barrels. 
B) import 9 million barrels. 
C) export 5 million barrels. 
D) export 14 million barrels.

Quizplus · Accepted Answer

At a domestic price of $130 per barrel, if the world price is higher at $135, the country will export oil. The difference between the domestic quantity demanded (20 million barrels) and the domestic quantity supplied (25 million barrels) at this price is 5 million barrels, indicating the country will export 5 million barrels to the world market.

Refer to the Information Provided in Figure 20