Use the information for the question(s) below. As an oil refiner, you are able to produce $76 worth of unleaded gasoline from one barrel of Alaska North Slope (ANS) crude oil. Because of its lower sulfur content, you can produce $77 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI) crude.
Assuming you currently have 10,000 bbl of WTI crude, the added benefit (cost) to you if you were to sell the of WTI crude and use the proceeds to purchase and refine ANS crude is closest to ________.
A) ($1400)
B) $1400
C) ($3908)
D) $3908

Question

Use the information for the question(s) below.  As an oil refiner, you are able to produce $76 worth of unleaded gasoline from one barrel of Alaska North Slope (ANS) crude oil. Because of its lower sulfur content, you can produce $77 worth of unleaded gasoline from one barrel of West Texas Intermediate (WTI) crude.
Assuming you currently have 10,000 bbl of WTI crude, the added benefit (cost) to you if you were to sell the  of WTI crude and use the proceeds to purchase and refine ANS crude is closest to ________.
A) ($1400) 
B) $1400 
C) ($3908) 
D) $3908

Quizplus · Accepted Answer

D) Total Benefits
No trade and refine WTI crude (base case) 11ea84dc_f57e_5469_9a63_753ba4a952f6_TB1316_11_TB1316_11 Sell WTI and use proceeds to buy ANS 11ea84dc_f57e_546a_9a63_a92014c9ba44_TB1316_11_TB1316_11 Buy ANS crude 11ea84dc_f57e_546b_9a63_0da41bda4601_TB1316_11_TB1316_11 Benefit 11ea84dc_f57e_7b7c_9a63_0778690b721e_TB1316_11_TB1316_11 11ea84dc_f57e_7b7d_9a63_8d81467d2d01_TB1316_11_TB1316_11 Sell WTI and use proceeds to buy ANS 11ea84dc_f57e_7b7e_9a63_a78d5371d14f_TB1316_11_TB1316_11

Use the Information for the Question(s) Below