Table 6.1 -Table 6.1 Indicates the Demand and Supply Schedules for Oil

question 29

Multiple Choice

Table 6.1
-Table 6.1 indicates the demand and supply schedules for oil in the United States.Suppose also that the world price of oil is $75 per barrel and that the United States can buy all the oil it wants at that price.Which of the following statements is TRUE about the impact of a law banning all oil imports?

• A)Consumers would pay a lower price for oil than they would under free trade.
• B)Domestic producers benefit from the law because they can charge a higher price and sell more.
• C)Total surplus in the oil market rises.
• D)Consumer surplus increases.

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Definitions:

Increase Assets

The act of growing the resources owned by an entity that have future economic value and can be measured and expressed in monetary units.

Business Entity Assumption

A principle in accounting that treats a business as separate from its owners or other businesses, allowing for independent financial accounting and reporting.

Accounting Equation

The accounting equation, Assets = Liabilities + Equity, is the fundamental formula in accounting, ensuring that a company's balance sheet is balanced.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing the owners' share.