1.) uses a diagram (tariff), define tariff, identify stakeholders, identify effect of a tariff on stakeholders (pro or con)
2.) Tariff- a tax place on imported goods to decrease demand by increasing the price of a good to product domestic firms and increase government revenue.
3.)
Tariffs
A tariff is a tax on imports, which can either be specific (so much per unit of sale) or ad valorem (a percentage of the price of the product). Tariffs reduce supply and raise the price of imports. This gives domestic equivalents a comparative advantage. As such, tariffs are distorting the market forces and may prevent consumers from gaining the benefit of all the advantages of international specialisation and trade. The impact of a tariff is shown in Figure 1 below.
Figure 1 Impact of a tariff
The tariff has the effect of shifting the world supply curve vertically upwards by the amount of the tariff. The level of imports will fall from QaQd to QbQc. The government will also raise revenue, shown by the blue shaded area. The level of domestic production will increase from 0Qa to 0Qb.
4.) foreign firms, domestic firms, domestic consumers, WTO, government, domestic retailers, tariff, tariff diagram + explanation + real world example (US tire tariff on china
