IB Economics HL Trade Protection Calculations

IB Economics HL Trade Protection Calculations
IB Economics guide, first assessment 2022

Review IB Economics HL trade protection calculations through tariffs, quotas and subsidies, including revenue, surplus, welfare loss and quantity effects.

How this is tested

  • calculate tariff revenue or subsidy effects from price gaps and import quantities
  • measure consumer surplus, producer surplus or welfare loss on trade diagrams
  • compare domestic and foreign producer revenue after tariffs, quotas or tariff removal

Question 1

Question 1(a)(vi)

(a)

Using Figure 3 and the information above, determine the consumption of soybeans in Egypt at the original price of US$650 per ton in 2022.

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Question 1(a)(vii)

(b)

Using Figure 3, calculate the change in total expenditures on soybeans after the 4 % tariff was imposed by the Egyptian government.

The following information relates to Egypt's economy:
- Net current transfers for Egypt have increased by more than 25 % since 2019 and reached US $ 31449.2 million. A large proportion of these current transfers are migrants' remittances.
- In 2019, according to the World Inequality Database (WID), the top 1 % of Egyptians with the highest incomes received 19 % of the total national income, while the bottom 50 % of Egyptians with the lowest incomes received only 17.2 %.

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