4.2 - Types of Trade protectionism

Question 1

Define tariff

Answer 1

Taxes imposed on imported goods as they enter the domestic economy, paid for by importer

Question 2

Tariff graph + stakeholder impact

Answer 2

• EBCD is loss in consumer surplus
• Domestic producers gain surplus EHGD
• Yellow is gain in tax rev
• Blue is welfare loss of inefficiency
• Brown is wlefare loss due to people who dont buy

Question 3

Define quota

Answer 3

A quota is a method of trade protection where a domestic government sets either a value or a quantity limit on imported goods into the domestic economy.

Question 4

Graph quota

Answer 4

• Fall in domestic cons surplus EBCD
• Domestic producer surplus gain is green
• Blue is increase in foreign producer surplus
• yellow is inefficiency WEL LOSS and brown is consumers who dont buy WEL LOSS

Question 5

Graph trade subsidy

Answer 5

• green is gain on prod surplus
• yellow is welfare loss due to inefficient people in market
• domestic consumers chilling because price is same

Question 6

Define administrative barriers

Answer 6

Administrative trade barriers are where the government imposes excessive rules, regulations and bureaucracy on imported goods.

Basically a hidden trade restriction

Question 7

List the administritive barriers

Answer 7

• Beuracracy
• Health and safety standards
• Environmental standards
• Government contracts
• patriotic campaigns