Learning objectives
Explain why a country imports a good when the world price is below its domestic equilibrium price and exports when the world price is above it
Show on a diagram the quantity imported or exported at the world price and identify the gain in total surplus from free trade
Analyze the effects of a tariff on domestic price, domestic production, consumption, imports, tariff revenue, consumer and producer surplus, and deadweight loss
Analyze the effects of an import quota and compare its outcomes with those of an equivalent tariff
Evaluate common arguments for protection against the efficiency losses that trade barriers create
Continue with a revision plan
These learning objectives are available to everyone. Sign in with an eligible plan to read the full note and worked examples.