The diagram to the right approximates the crude oil market in the mid-1980s in the United States. Equilibrium price was $22.67 per barrel with 9.33 million barrels consumed on a daily basis. If the world price is lower than the equilibrium price for a domestic nation (in this case, the United States), the possibility exists for foreign countries to export a product to the domestic nation. This is the case for crude oil. In this market, assume the world price of crude oil is $16 per barrel. 1.) Using the line drawing tool, determine the quantity of crude oil imports by the United States by drawing a horizontal line at the world price of $16 per barrel. Label this line 'P World' 2.) Using the point drawing tool, determine quantity demanded at $16 per barrel. Label this point 'PQD' 3.) Using the point drawing tool, determine quantity supplied at $16 per barrel. Label this point 'PQs' Carefully follow the instructions above and only draw the required objects. The amount of imports is million barrels per day. Price per barrel ($) U.S. Market for Crude Oil, 1980s 40] 36- SU.S. ✓ 32- 28- 24- 20- 12- 8- 4 0 2 4 DU.S. 6 8 10 12 14 16 18 Millions of barrels per day 20
The diagram to the right approximates the crude oil market in the mid-1980s in the United States. Equilibrium price was $22.67 per barrel with 9.33 million barrels consumed on a daily basis. If the world price is lower than the equilibrium price for a domestic nation (in this case, the United States), the possibility exists for foreign countries to export a product to the domestic nation. This is the case for crude oil. In this market, assume the world price of crude oil is $16 per barrel. 1.) Using the line drawing tool, determine the quantity of crude oil imports by the United States by drawing a horizontal line at the world price of $16 per barrel. Label this line 'P World' 2.) Using the point drawing tool, determine quantity demanded at $16 per barrel. Label this point 'PQD' 3.) Using the point drawing tool, determine quantity supplied at $16 per barrel. Label this point 'PQs' Carefully follow the instructions above and only draw the required objects. The amount of imports is million barrels per day. Price per barrel ($) U.S. Market for Crude Oil, 1980s 40] 36- SU.S. ✓ 32- 28- 24- 20- 12- 8- 4 0 2 4 DU.S. 6 8 10 12 14 16 18 Millions of barrels per day 20
Chapter18: International Trade And Finance
Section: Chapter Questions
Problem 16SQ
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![The diagram to the right approximates the crude oil market in the mid-1980s in the United States.
Equilibrium price was $22.67 per barrel with 9.33 million barrels consumed on a daily basis.
If the world price is lower than the equilibrium price for a domestic nation (in this case, the
United States), the possibility exists for foreign countries to export a product to the domestic nation. This
is the case for crude oil. In this market, assume the world price of crude oil is $16 per barrel.
1.) Using the line drawing tool, determine the quantity of crude oil imports by the United States by
drawing a horizontal line at the world price of $16 per barrel. Label this line 'P World'
2.) Using the point drawing tool, determine quantity demanded at $16 per barrel. Label this point 'PQD'
3.) Using the point drawing tool, determine quantity supplied at $16 per barrel. Label this point 'PQs'
Carefully follow the instructions above and only draw the required objects.
The amount of imports is million barrels per day.
Price per barrel ($)
U.S. Market for Crude Oil, 1980s
40]
36-
SU.S.
✓
32-
28-
24-
20-
12-
8-
4
0
2
4
DU.S.
6 8 10 12 14 16 18
Millions of barrels per day
20](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff739e319-24f0-41bc-9841-9629230159f2%2F2663aa6e-46f0-46f3-b227-063c9f19a2d7%2Fd9z38d7_processed.png&w=3840&q=75)
Transcribed Image Text:The diagram to the right approximates the crude oil market in the mid-1980s in the United States.
Equilibrium price was $22.67 per barrel with 9.33 million barrels consumed on a daily basis.
If the world price is lower than the equilibrium price for a domestic nation (in this case, the
United States), the possibility exists for foreign countries to export a product to the domestic nation. This
is the case for crude oil. In this market, assume the world price of crude oil is $16 per barrel.
1.) Using the line drawing tool, determine the quantity of crude oil imports by the United States by
drawing a horizontal line at the world price of $16 per barrel. Label this line 'P World'
2.) Using the point drawing tool, determine quantity demanded at $16 per barrel. Label this point 'PQD'
3.) Using the point drawing tool, determine quantity supplied at $16 per barrel. Label this point 'PQs'
Carefully follow the instructions above and only draw the required objects.
The amount of imports is million barrels per day.
Price per barrel ($)
U.S. Market for Crude Oil, 1980s
40]
36-
SU.S.
✓
32-
28-
24-
20-
12-
8-
4
0
2
4
DU.S.
6 8 10 12 14 16 18
Millions of barrels per day
20
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