5. Suppose that the United States and other oil-importing nations levied a tariff on crude oil that was equal to the import price (approximately $20.00 per barrel in 1 979)

minus $1 5.00 per barrel. Thus, an increase in the import price (above $ 1 5.00 per barrel)

would automatically raise the tariff by an equal amount. What impact would this policy have on

(a) U.S. consumption of foreign oil,

(b) the elasticity of demand for foreign oil as seen by foreign producers, and

(c) the incentive of the international oil cartel (OPEC)

to raise its price for oil?