Joon

AP Microeconomics Chapter 9 Quiz Mr. Grochowski H 507 Name:Joon___


 * 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 market price is above the world market, the country imports the goods/services. Consumers surplus increase because imported goods are less expensive. The producer surplus stays the same. If the price is elastic, the total surplus should increase because quantity demanded increased more significantly with the lowering of the price brought by the imported good/service.


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

Tax and quotas are designed to protect and ensure that the domestic market is competent. Consumers like imported goods because they often are cheaper than the domestic goods. Tariffs and quotas can discourage a buyer from buying. Tariffs cause dead weight loss.

Back -->
 * 1) 3 How what is the differences and similarities between tariffs and quotas?

Difference: Tariffs are "tax " on goods or services when importing. Quotas are limits to trade. For example, the the government says "Korea is only letting in 1000 Toyotas." Similiarities: quotas and tariffs are all enforced by the government and it is designed to protect the domestic market of goods and services.