-If the economy in the diagram above is open to trade,the world price of oil is $20 per barrel,and the government places a $5 per-barrel tariff on oil imports,then this economy will ________ million barrels of oil.

Question

Quizplus · Accepted Answer

With a world price of $20 and a $5 tariff, the effective price is $25. The economy will import the difference between domestic demand and supply at this price, which is 7 million barrels.

-If the Economy in the Diagram Above Is Open to Trade,the