Practise IB Economics HL 4.2.5 by calculating and interpreting trade protection effects, including tariff revenue, quotas and welfare changes, using marked exam evidence.
Figure 2 illustrates the daily world price of wheat in US dollars (US$) per kilogram from August 2020 to February 2021.
Figure 2
Figure 3 illustrates the Turkish wheat market. Before the 20 % tariff was eliminated, the price for wheat in Turkey was US per kilogram. S is domestic supply, D is domestic demand, S w is world supply and S t is world supply with the tariff.
Figure 3
Table 4 shows the income tax rates in Turkey for 2020.
Table 4
Beycan resides in Turkey and earns TL955000 annually.
Table 5 shows the income earned by different quintiles of Turkey's population for 2017.
Table 5
Table 6 shows selected tax revenue sources and the Gini coefficient for Turkey, Austria, Germany and the OECD average.
Table 6
The following information was published in the United Nations Development Programme 2016 Regional Human Development Report: "Inequalities in Turkey: An Overview":
- The Human Development Report reported that Turkey's gross national income (GNI) per capita ranks at 50, while its standard Human Development Index (HDI) rank is lower at 62 .
- Turkey's Inequality-adjusted Human Development Index (IHDI) score is almost 16 % lower than its standard HDI score.
- The share of public expenditure on education is 2.9 % of gross domestic product (GDP) in Turkey, while the average share of public expenditure on education is 4.9 % of GDP among other high human development countries. Even among low human development countries, the average share is 3.6 %.
Using Figure 3, calculate the change in social/community surplus that resulted from the elimination of the 20 % tariff.
The currency of Turkey is the Turkish lira (TL). If TL1.00 = US$0.134, using Figure 3, calculate in TL, the change in the monthly total revenues of Turkish wheat producers as a result of the elimination of the 20 % tariff.