4.2 Supply and Demand Analysis: An Oil Import Fee
Refer to the information provided in Figure 4.4 below to answer the questions that follow. Figure 4.4
-Refer to Figure 4.4. If the United States levies no taxes on imported oil, which of the following would occur?
A) The price of oil in the United States would fall to $100 per barrel, and the United States would import 10 million barrels of oil per day.
B) The price of oil in the United States would be $125 per barrel, and the United States would import 6 million barrels of oil per day.
C) The price of oil in the United States would be $150 per barrel, and the United States would import 2 million barrels of oil per day.
D) The price of oil in the United States after the U.S. government eliminated all taxes on imported oil cannot be determined from this information.

Question

4.2 Supply and Demand Analysis: An Oil Import Fee
Refer to the information provided in Figure 4.4 below to answer the questions that follow.  Figure 4.4
-Refer to Figure 4.4. If the United States levies no taxes on imported oil, which of the following would occur?
A) The price of oil in the United States would fall to $100 per barrel, and the United States would import 10 million barrels of oil per day. 
B) The price of oil in the United States would be $125 per barrel, and the United States would import 6 million barrels of oil per day. 
C) The price of oil in the United States would be $150 per barrel, and the United States would import 2 million barrels of oil per day. 
D) The price of oil in the United States after the U.S. government eliminated all taxes on imported oil cannot be determined from this information.

Quizplus · Accepted Answer

According to Figure 4.4, if the United States levies no taxes on imported oil, the equilibrium price would be $125 per barrel, and the equilibrium quantity would be 6 million barrels of oil per day. This means that Choice B is the correct answer.

42 Supply and Demand Analysis: an Oil Import Fee