Asked by Britney Hicks on May 07, 2024
Verified
Refer to Figure 4.4. Assume that initially there is free trade. The price of oil in the United States will increase to $150 per barrel if the United States then imposes ________ tariff per barrel of imported oil.
A) no
B) a $25
C) a $50
D) a $100
Tariff
A tax imposed by a government on goods and services imported from other countries, designed to raise revenue or protect domestic industries.
Imported Oil
Oil that is brought into a country from foreign sources for use in energy production, manufacturing, and other applications. It contrasts with domestically produced oil.
- Comprehend the repercussions of tariffs and worldwide trade strategies on national markets.
Verified Answer
NM
Nesha MarieMay 13, 2024
Final Answer :
B
Explanation :
A $25 tariff on imported oil would raise the cost of imported oil to match the domestic price of $150 per barrel, assuming the initial free trade price was lower than this.
Learning Objectives
- Comprehend the repercussions of tariffs and worldwide trade strategies on national markets.