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AP Microeconomics 2.9 International Trade and Public Policy Questions

Use world prices to analyze imports and exports, then evaluate how tariffs and quotas change domestic market outcomes and surplus.

Syllabus
Effective Fall 2022
Course
AP Microeconomics

Exam points

  • Calculate imports, exports, domestic surplus, and tariff revenue at a world price.
  • Explain how tariffs, quotas, and free trade change domestic prices, quantities, and total surplus.

Covered syllabus points

POL-1.B—a. Define tariffs and quotas. b. Explain (using graphs where appropriate) how markets are affected by public policy related to…

Question 1

[Maximum number: 3]

The graph provided shows the market for rice in the country of Rushland.

Figure for Question 1 — AP Microeconomics

Question (a)

(a)

Suppose that instead of the price floor, Rushland engages in international trade and the world price of rice is $5 per bushel.

[ 3 ]

Question (i)

(i)

Will Rushland export or import rice? Explain using numbers from the graph.

[ 1 ]

Question (ii)

(ii)

Calculate the domestic consumer surplus when Rushland engages in international trade.

Show your work.

[ 1 ]

Question (iii)

(iii)

Calculate the total revenue that Rushland's farmers will earn at the world price. Show your work.

[ 1 ]
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