Tariffs
Types of Trade Protection
AO3·AO4·Diagram required
Syllabus requirement
A tax on imported goods that raises domestic prices, reduces imports, and alters stakeholder outcomes (consumers, producers, government).
Assessment objectives
AO3 Synthesis and EvaluationAO4 Use of Appropriate Skills
Required diagram: Standard tariff diagram showing price increase, reduced quantity imported, changes in consumer and producer surplus, government revenue, and welfare loss.
Summary
This topic explains tariffs, which are specific taxes on imported goods and services used as a form of trade protection. It covers how a tariff raises the domestic price, reduces imports, increases domestic production and government revenue, and creates welfare losses shown by deadweight loss in the market diagram. Understanding tariffs is important for evaluating effects on consumers, producers, governments and overall market efficiency.
