Economics 0455 · IGCSE · Globalisation, free trade and protection
Globalisation, free trade and protection — practice question
The World Trade Organization (WTO) estimates that India has the highest degree of trade protection among the major economies. The steepest tariffs are levied on primary-sector goods. For instance, in 2018 India applied a tariff of about 90% to coffee imports in order to protect its coffee farmers. By contrast, the markets for coffee substitutes and complements are not subject to that level of government intervention.
(a)[2]
Identify two methods of trade protection that are not tariffs.
(b)[4]
Explain how changes in the prices of coffee substitutes and complements influence the demand for coffee.
(c)[6]
Analyse possible reasons why a government may choose to intervene in a market.
(d)[8]
Discuss whether high tariffs can cut unemployment.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Quotas on imports” …