IB Economics HL 4.2.2 Quotas Questions

$\$ 2$ per kg.
Level ..... Marks
0 The work does not reach a standard described by the descriptors below. ..... 0
1 The written response is limited. ..... 1-2
For explaining that the impact on price and quantity of consumption and

imports would be identical to that of the quota, but the welfare loss would

be greater with a quota.
P=$\$ 5$, imported quantity $=150000 \mathrm{~kg}, \mathrm{Qd}=300000 \mathrm{~kg}$.
If the result of the tariff (price, Q d, imports) is identified correctly award [1].
OR
If one welfare loss is identified accurately, award [1].
A response which indicates that the foregone tariff revenue is the reason for the difference, but with little/no accurate supporting evidence, should be awarded [2].

2 The written response is accurate.
For explaining that the welfare loss is likely to be greater for the quota, because, even though the impact on price and quantity is the same in this diagram in the case of a $\$ 2$ tariff, the government does not necessarily benefit in terms of revenue from a quota.
A response which explains that price, quantity (and imports) would be the same with a tariff or quota, but that there would be no tariff revenue with the quota so welfare loss would be greater without reference to the diagram should be awarded [3].
N.B. Some candidates may annotate the diagram - these annotations can be seen and rewarded by looking at the script in full response mode.