Presently,the United States Produces as Well as Imports Crude Oil

Multiple Choice

Presently,the United States produces as well as imports crude oil.Suppose the government imposes a $10 per barrel excise tax on imported oil.What will happen?

A) The price of oil will rise by $10;less oil will be consumed but sales of foreign producers will rise at the expense of domestic producers.
B) The price of oil will rise;less oil will be consumed but sales of domestic producers will rise at the expense of the foreign oil producers.
C) The price of oil will decline and more U.S.-produced oil will be sold in place of the heavily taxed foreign oil.
D) The price of oil will decline and more oil will be consumed but the relative shares of the oil market between the U.S.and foreign oil producers will be unchanged.