The U.S. is one of the main producers of oil in the world. Still, at the current world price, there is a shortage of oil in the U.S. market and the country has to cover it through imports. Suppose the U.S. government decided to introduce an import tariff St on oil imports. i. Draw a diagram that shows the effect of this policy on the U.S. oil market and on the global oil market. Indicate the effect of oil import tariff on U.S. consumers, producers and government revenue.

The U.S. is one of the main producers of oil in the world. Still, at the current world price, there is a shortage of oil in the U.S. market and the country has to cover it through imports. Suppose the U.S. government decided to introduce an import tariff St on oil imports. i. Draw a diagram that shows the effect of this policy on the U.S. oil market and on the global oil market. Indicate the effect of oil import tariff on U.S. consumers, producers and government revenue.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter9: Application: International Trade

Section: Chapter Questions

Problem 3PA

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