Use the information for the question(s) below. As an oil refiner, you are able to produce $77 worth of unleaded gasoline from one barrel of Alaska North Slope (ANS) crude oil. Because of its lower sulfur content, you can produce $78 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI) crude.
Another oil refiner is offering to trade you of Alaska North Slope (ANS) crude oil for of West Texas Intermediate (WTI) crude oil. Assuming you currently have of WTI crude, the added benefit (cost) to you if you take the trade is closest to ________.
A) ($1550)
B) $1550
C) ($3475)
D) $3475

Question

Use the information for the question(s) below.  As an oil refiner, you are able to produce $77 worth of unleaded gasoline from one barrel of Alaska North Slope (ANS) crude oil. Because of its lower sulfur content, you can produce $78 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI) crude.
Another oil refiner is offering to trade you  of Alaska North Slope (ANS) crude oil for  of West Texas Intermediate (WTI) crude oil. Assuming you currently have  of WTI crude, the added benefit (cost) to you if you take the trade is closest to ________.
A) ($1550) 
B) $1550 
C) ($3475) 
D) $3475

Quizplus · Accepted Answer

B) Total Benefits
No trade and refine WTI crude (base case) 11ea84dc_f57e_0643_9a63_f176f73bc592_TB1316_11_TB1316_11 Trade WTI for ANS crude 11ea84dc_f57e_2d54_9a63_5957cb06a102_TB1316_11_TB1316_11 11ea84dc_f57e_2d55_9a63_f12346216726_TB1316_11_TB1316_11 Benefits of trading WTI for ANS crude 11ea84dc_f57e_2d56_9a63_11c5186f6eb6_TB1316_11_TB1316_11

Use the Information for the Question(s) Below