4.1.4 Protectionism

Question 1

What is a tariff?

Answer 1

A tariff is a tax on imported goods

Question 2

Characteristics of a tariff

Answer 2

• A tariff is a form of trade barrier designed to restrict trade
• Consumers face higher prices due to extra charges
• High revenue for government

Question 3

What is a import Quota?

Answer 3

• A physical limit on quantity of imports allowed
• Domestic producers face less of a threat
• Quotes will increase prices as fewer of cheaper imports will be available

Question 4

What is government legislation?

Answer 4

• Imported goods need to meet strict regulations

- Goods that fail to reach standards face administrative barriers

Question 5

What is a subside?

Answer 5

• Financial support given to a domestic producer to help compete with over sea firms
• Help lower prices → Low production costs and higher supply
• Subsidies given to exporters will make it easier to break into the foreign market