Consider the following demand and supply equations for oil market in the US. Answer the next 3 questions according to these equations.
Demand p=580 – 40 Qd
Supply p= 4 + 60Qs
1.With free trade and international price of $100 per barrel, how much does the US consume and produce oil?
A.consume 12, produce 2.
B.consume 10, produce 2.
C.consume 12, produce 1.6
D.consume 10, produce 1.6
2.Given your answer below, does the US exports or imports oil?
A.We need more information to answer this question.
B.US imports oil.
C.US both exports and imports oil.
D.US exports oil.
3.If the US stops engaging in international trade, what would be its equilibrium price and quantity for oil?
A.P* = 39.6 and Q* = 2.76
B.P* = 129.6 and Q* = 4.76
C.P* = 376.6 and Q* = 5.95
D.P* = 349.6 and Q* = 5.76
4.Opening up free trade does hurt people in import-competing industries in the short run. true or false, explain