42 Supply and Demand Analysis: an Oil Import Fee

question 52

Multiple Choice

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. Assume that initially there is free trade. Tax revenue of $50 million per day will be generated if the United States imposes a ________ tax per barrel on imported oil.

• A) $25
• B) $50
• C) $100
• D) $150

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Definitions:

Utilitarian Ethical Theory

An ethical theory suggesting that the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.

Profit Maximization Theory

The concept that businesses operate with the primary goal of increasing profits to the highest achievable level given their resources.

Martha Stewart

Martha Stewart is an American retail businesswoman, writer, and television personality, known for her lifestyle brand and media ventures, which focus on home improvement, cooking, and decorating.

Insider Trading

The trading of a public company's stock or other securities by individuals with access to non-public, material information about the company.