Check Your Work

1. US production would rise to 9.45M barrels per day; US consumption would fall to 19.95M barrels per day; the quantity of imports would decrease to 10.5M barrels per day. In percentage terms, imports drop by 12.5%.
2. CS decreases by $614M per day; PS increases by $277M per day; the tariff raises $315M per day; DWL is $22.5M per day.
3. Annual revenue is $315M * 365 = $115B. The tariff would raise more than enough money to pay for all of the federal government's education, training, and social service activities.
4. If the policy had been a tariff, US production would have remained at 9M barrels per day, US consumption would have fallen to 19.95M barrels per day (just as it did with the tariff); and imports would have dropped to 10.95M barrels per day (19.95M - 9M). The lost of CS would be the same as under the tariff, but there would be no PS. Instead, the government would collect $598.5M per day in tax revenue (19.95M*$30), and DWL would be $15.8M per day. Over the course of a year, the tax would raise $218B.