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Edexcel IGCSE Economics 2.2.2 International Trade Questions

Use international-trade questions to draw tariff effects, explain protection and compare trade patterns across developed and developing countries.

Syllabus
First assessment 2019
Course
Economics 4EC1

Exam points

  • Draw tariff effects as a leftward supply shift with higher price and lower quantity.
  • Explain reasons for protection, including jobs, infant industries and dumping.
  • Compare developed and developing trade patterns using export or commodity data.

Covered syllabus points

2.2.2.a Advantages and disadvantages of free trade2.2.2.b Reasons for protection2.2.2.c Methods of protection2.2.2.d Modern trading blocs2.2.2.e Role of the World Trade Organization (WTO)2.2.2.f Trade patterns of developed and developing countries

Question 1

[Maximum number: 6]

Question (a)

(a)

Which one of the following is a role of the World Trade Organization (WTO)?

A

Writing off debts

B

Settling trade disputes

C

Increasing trade barriers

D

Paying subsidies to producers

[ 1 ]

Question (b)

(b)

Describe one advantage of free trade for consumers.

[ 2 ]

Question (c)

(c)

In May 2020, China introduced a tariff of 80\% on Australian barley.

Using the diagram below, draw the effects of the introduction of a tariff on the equilibrium price and quantity of Australian barley. Label the new curve, the new equilibrium price and new equilibrium quantity.

Figure 2

Figure 2

[ 3 ]

Question 2

[Maximum number: 1]

Which one of the following is a reason why there is protection for international trade?

A

To allow dumping

B

To promote free trade

C

To protect domestic jobs

D

To increase the current account deficit

Question 3

[Maximum number: 6]

Question (a)

(a)

Using the diagram below, draw the effects of the introduction of a quota on the equilibrium price and quantity of a good.
Label the new curve, the new equilibrium price and new equilibrium quantity.

Figure 1

Figure 1

[ 3 ]

Question (b)

(b)

In 2017 the US government wanted to introduce a 300% tariff on imported aircraft made by Canadian manufacturer Bombardier.

Explain one way the World Trade Organisation could promote free trade between countries such as Canada and the US.

[ 3 ]

Question 4

[Maximum number: 2]

Describe one advantage of free trade for consumers.

Question 5

[Maximum number: 3]

Using the diagram below, draw the effects of the introduction of a quota on the equilibrium price and quantity of a good.
Label the new curve, the new equilibrium price and new equilibrium quantity.

Figure 1

Figure 1

Question 6

[Maximum number: 2]

What is meant by the term trading bloc?

Question 7

[Maximum number: 3]

In 2017 the US government wanted to introduce a 300% tariff on imported aircraft made by Canadian manufacturer Bombardier.

Explain one way the World Trade Organisation could promote free trade between countries such as Canada and the US.

Question 8

[Maximum number: 6]

Figure 5 shows the adult entry fee into the Corcovado National Park in Costa Rica and the current exchange rate between the British pound ( £ ) and the Costa Rican colón (CRC).

Figure 5

Figure 5

Costa Rica is a developing country that relies on the export of agricultural commodities such as coffee, bananas, pineapples and vegetables. In 2022, exports from Costa Rica to the UK were valued at £ 516 m. Vegetables and fruit accounted for 73.4% of all goods exported to the UK from Costa Rica.

With reference to the data above and your knowledge of economics, analyse how the trade patterns may differ between a developed and a developing country.

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