Suppose that the world price of oil is $70 per barrel and that the United States can buy all the oil it wants at this price. Suppose also that the demand and supply schedules for oil in the United Sta follows: Price ($ 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 Now suppose that the United States allows no oil imports. The equilibrium price in the United states is $ 70 per barrel and the equilibrium quantity is 20 million barrels. If the United States imposed a price ceiling of $65 per barrel on the oil market and prohibited imports, there would be an of excess supply excess demand million barrels of oil.
Suppose that the world price of oil is $70 per barrel and that the United States can buy all the oil it wants at this price. Suppose also that the demand and supply schedules for oil in the United Sta follows: Price ($ 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 Now suppose that the United States allows no oil imports. The equilibrium price in the United states is $ 70 per barrel and the equilibrium quantity is 20 million barrels. If the United States imposed a price ceiling of $65 per barrel on the oil market and prohibited imports, there would be an of excess supply excess demand million barrels of oil.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Suppose that the world price of oil is $70 per barrel and that the United States can buy all the oil it wants at this price. Suppose also that the demand and supply schedules for oil in the United Sta
follows:
Price
($ 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
Now suppose that the United States allows no oil imports.
The equilibrium price in the United states is $ 70 per barrel and the equilibrium quantity is 20 million barrels.
If the United States imposed a price ceiling of $65 per barrel on the oil market and prohibited imports, there would be an
of million barrels of oil.
excess supply
excess demand
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