2.1 Suppose that the world price of oil is $60 per barrel andthat the United States can buy all the oil it wants at thisprice. Suppose also that the demand and supply schedulesfor oil in the United States are as follows:Price($ Per Barrel)5560657075U.S. QuantityDemanded2624222018U.S. QuantitySupplied1416182022a. On graph paper, draw the supply and demand curves forthe United States.b. With free trade in oil, what price will Americans pay fortheir oil? What quantity will Americans buy? How muchof this will be supplied by American producers? How much will be imported? Illustrate total imports on yourgraph of the U.S. oil market.c. Suppose the United States imposes a tariff of $5 per bar-rel on imported oil. What quantity would Americansbuy? How much of this would be supplied by Americanproducers? How much would be imported? How muchtariff revenue would the government collect?d. Briefly summarize the impact of an oil tariff by explainingwho is helped and who is hurt among the followinggroups: domestic oil consumers, domestic oil producers,foreign oil producers, and the U.S. government.

Suppose that the world price of oil is $60 per barrel and that the United States can buy all the oil it wants at this price. Suppose also that the demand and supply schedules for oil in the United States are as follows: Price ($ Per Barrel) 55 60 65 70 75 U.S. Quantity Demanded" 26 24 22 20 18 U.S. Quantity Supplied 14 16 18 20 22 a. On graph paper, draw the supply and demand curves for the United States. b. With free trade in oil, what price will Americans pay for their oil? What quantity will Americans buy? How much of this will be supplied by American producers? How

Suppose that the world price of oil is $60 per barrel and that the United States can buy all the oil it wants at this price. Suppose also that the demand and supply schedules for oil in the United States are as follows: Price ($ Per Barrel) 55 60 65 70 75 U.S. Quantity Demanded" 26 24 22 20 18 U.S. Quantity Supplied 14 16 18 20 22 a. On graph paper, draw the supply and demand curves for the United States. b. With free trade in oil, what price will Americans pay for their oil? What quantity will Americans buy? How much of this will be supplied by American producers? How

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 3TY

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