Supply and Demand with International Trade (Old Version)

The video tutorial covers key economic concepts, focusing on quotas and tariffs. It explains consumer and producer surplus before and after international trade, highlighting the changes in surplus and imports. The tutorial discusses the impact of tariffs on consumer and producer surplus, as well as government revenue. It concludes with an exploration of quotas and a summary of the benefits and drawbacks of international trade.

What are the two key economic concepts introduced in the first section?

• Monetary and Fiscal Policy

• Quotas and Tariffs

• Supply and Demand

• Inflation and Deflation

Before international trade, what is the consumer surplus if the equilibrium price is $50?

• $100

• $0

• $50

• $70

How does international trade affect consumer surplus?

• It has no effect on consumer surplus

• It eliminates consumer surplus

• It increases consumer surplus

• It decreases consumer surplus

What is the effect of a $5 tariff on the price of a product?

• It keeps the price the same

• It doubles the price

• It increases the price by $5

• It decreases the price by $5

How does a tariff impact producer surplus?

• Producer surplus remains unchanged

• Producer surplus increases

• Producer surplus decreases

• Producer surplus is eliminated

What is the main difference between a quota and a tariff?

• Both have the same effect

• A quota limits quantity, a tariff generates revenue

• A tariff limits quantity, a quota does not

• A quota generates revenue, a tariff does not

How does international trade benefit consumers?

• By lowering prices

• By reducing choices

• By increasing prices

• By increasing taxes