Practise IB Economics SL 4.2.1 by explaining tariff effects on prices, domestic production, consumption, imports, government revenue and welfare using marked exam evidence.
Using real-world examples, evaluate the effects of a country imposing a tariff on a good.
Answers may include:
- Terminology: tariff.
- Explanation: of how a tariff will increase prices for domestic consumers, decrease their quantity demanded and reduce their consumer surplus. A tariff will also increase the price for domestic producers, increase their quantity supplied and increase their revenues and producer surplus. Additionally, a tariff will increase domestic government tax revenue and reduce the quantity imported.
- Diagram: a tariff diagram to show the impact on consumers, producers, and the government.
- Real-world examples: of where a tariff has been applied to an industry and the impact it has had on consumers, producers, and the government.
- Synthesis (evaluate): effect on different stakeholders, consideration of the advantages and disadvantages of imposing a tariff such as retaliation by other countries, which affects domestic producers' export markets and how tariffs might lead to higher costs of production for domestic producers, causing cost-push inflation. There could also be evaluation of the efficiency losses caused by a tariff.
N.B. It should be noted that definitions, theory, and examples that have already been given in part (a), and then referred to in part (b), should be rewarded.
Examiners should be aware that candidates may take a different approach which, if appropriate, should be rewarded.
Assessment Criteria
Marks
Level descriptor
0
- The work does not reach a standard described by the descriptors below.
1-3
- The response indicates little understanding of the specific demands of the question.
- Economic theory is stated but it is not relevant.
- Economic terms are stated but they are not relevant.
- The response contains no evidence of synthesis or evaluation.
- A real-world example(s) is identified but it is irrelevant.
4-6
- The response indicates some understanding of the specific demands of the question.
- Relevant economic theory is described.
- Some relevant economic terms are included.
- The response contains evidence of superficial synthesis or evaluation.
- A relevant real-world example(s) is identified.
7-9
- The response indicates understanding of the specific demands of the question, but these demands are only partially addressed.
- Relevant economic theory is partly explained.
- Some relevant economic terms are used appropriately.
- Where appropriate, relevant diagram(s) are included.
- The response contains evidence of appropriate synthesis or evaluation but lacks balance.
- A relevant real-world example(s) is identified and partly developed in the context of the question.
10-12
- The specific demands of the question are understood and addressed.
- Relevant economic theory is explained.
- Relevant economic terms are used mostly appropriately.
- Where appropriate, relevant diagram(s) are included and explained.
- The response contains evidence of appropriate synthesis or evaluation that is mostly balanced.
- A relevant real-world example(s) is identified and developed in the context of the question.
13-15
- The specific demands of the question are understood and addressed.
- Relevant economic theory is fully explained.
- Relevant economic terms are used appropriately throughout the response.
- Where appropriate, relevant diagram(s) are included and fully explained.
- The response contains evidence of effective and balanced synthesis or evaluation.
- A relevant real-world example(s) is identified and fully developed to support the argument.