42 Supply and Demand Analysis: an Oil Import Fee

question 114

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. 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.

---

Definitions:

Terminating Decimal

A decimal with a limited number of digits following the decimal point.

Decimal Equivalent

The representation of a fraction or percentage as a decimal number.

Percent Equivalent

Percent Equivalent is a way of expressing a number as a fraction of 100, commonly used in calculating interest rates and statistical data.

Terminating Decimal

A decimal number that has a finite number of digits after the decimal point.