Work through the list without notes. If you cannot do a statement, follow its link, then come back. Guide = study guide; Practice = practice questions.
Understanding
- I can define a tariff and an import quota in one sentence each. (Guide: “Tariffs and quotas: why and how”)
- I can explain why a small open economy’s domestic price becomes the world price. (Guide: “From a closed market to an open one”)
- I can say whether a country imports or exports by comparing the world price with the autarky price. (Guide: “The exporting case”; Practice Q2, Q7)
- I can name who gains and who loses surplus when a country imports and when it exports. (Guide: summary table; Practice Q2)
Calculation and graphing
- I can calculate imports or exports as a gap between quantity demanded and quantity supplied. (Guide: Worked examples 1 and 3; Practice Q1, Q7)
- I can calculate consumer, producer and total surplus before and after a market opens to trade. (Guide: Worked example 1; Practice Q4)
- I can draw a labelled tariff graph with the world price, the price with the tariff, and the new imports. (Guide: Figure 2; Practice Q5)
- I can calculate tariff revenue, the deadweight loss and the changes in consumer and producer surplus from a tariff. (Guide: Worked example 2; Practice Q5)
- I can find the smallest tariff that stops all imports. (Guide: Worked example 2(d); Practice Q5(d))
- I can find the domestic price under a binding import quota, using a schedule or the demand and supply equations. (Guide: “Quotas: effects without a graph”; Practice Q6)
Reasoning
- I can explain why most of the producers’ loss from imports is a transfer, not a loss to the country. (Guide: “The importing case on a graph”)
- I can explain why a tariff moves producers along their supply curve rather than shifting it. (Guide: “Common misconceptions”; Practice Q3)
- I can explain how a quota raises domestic production and lowers consumer and total surplus, and why it earns no tariff revenue. (Practice Q6)
- I can evaluate a claim that trade “harms” a country by weighing the losing group against the net gain. (Practice Q7)
All ticked? That completes Unit 2. Move on to Topic 3.1, the production function, or return to the course roadmap.