Q. 1. Use the data in the preceding problem to answer the subsequent questions. Currently suppose
that the United States allows no oil imports.
a. What are equilibrium quantity and price for oil in the United States?
b. If the United States imposed a price ceiling of $74 per barrel on the oil market and
banned imports would there be an excess supply or an excess demand for oil.
If so, how much?
c. Under the cost ceiling also quantity supplied and quantity demanded differs. Illustrate which among the 2 will determine how much oil is purchased? Briefly explain
2. On April 20, 2010 an oil-drilling platform owned by British Petroleum exploded in the Gulf of Mexico causing oil to leak into the gulf at estimates of 1.5 to 2.5 million gallons per day from well over two months. Due to the oil waters which has devastated the commercial fishing industry in the area. Explain how the reduction in supply from the reduced fishing waters will either increase or decrease consumer surplus and producer surplus, and show these changes graphically.