Tariffs (HL Extension)
Types of Trade Protection
AO4·HL
Syllabus requirement
In addition to understanding the general effects of tariffs, HL students must be able to calculate the impact on different stakeholders using areas from the diagram.
Assessment objectives
AO4 Use of Appropriate Skills
Higher LevelThis topic is assessed at HL.
Summary
This HL extension explains how to calculate the numeric effects of a specific tariff using tariff diagrams. It shows how a tariff raises the domestic price, reduces quantity demanded, increases domestic production and government revenue, reduces consumer surplus, changes producer and foreign producer revenue, and creates a welfare loss (deadweight loss). These calculations are required for AO4 analyses in HL exam questions.
