Sunyoung

AP Microeconomics Chapter 9 Quiz Mr. Grochowski H 507 Name: Sun Young Park


 * 1) 1 Explain the changes in consumer, producer, and total surplus when a domestic market enters the world market and the market price is above the domestic price.

When the domestic market enters the world market and the market is above the domestic price, then the country would export its products. By exporting the goods, the consumer surplus will decrease, while the producer surplus will increase. The total surplus of the market will stay the same.


 * 1) 2 Explain show the changes in efficiency that occur when the government imposes a tariff or quota on a good domestically.

When the government imposes a tariff on a good domestically, the market would become inefficient. Any government intervention, such as taxes or tariffs, will distort a market. In fact, this tariff did distort the market by making both consumer and supplier to be not satisfied. However, through the tariff, it allowed the market to get closer to the equilibrium when there was no given price that was designed on the certain product.

The difference between tariffs and quotas, is that quota is a limited number of certain products under the government law, while the tariffs are the given price that the government puts on the goods that are imported or exported. The similarity between these two, is that they are both related to the fact that government intervened the market.
 * 1) 3 How what is the differences and similarities between tariffs and quotas?