Activity 3.4
Module Test

Putting Your Knowledge to Use


Now that we have looked at Demand, Supply, and Market Equilibrium individually, let's put it all together to learn more about how the prices you pay for products are determined and to understand how Tariffs on Foreign goods impact prices.

What is a Tariff?

Tariffs or Custom Duties  is defined as a tax placed on foreign goods by the Government to protect domestic manufactures.

Impact of a Tariff on Imported Goods

Impact #1  Higher Prices



As the Government taxes imported goods it generally makes these goods more expensive.  As you know, when the price of an imported good is comparatively higher than a domestic good, the demand for the imported good falls.

Impact #2 Decline in Trade


When other nations see the United States taxing their goods they retaliate by taxing our goods we export to them, causing a overall decline in the volume of World Trade.
 

Impact of Supply and Demand on Other Industries

Complementary Goods and Linked Industries     

When the Demand and Supply for a good shifts it causes a change in the Demand or Supply of related industries that are complements or providers of raw materials to that good

Peanut butter and Jelly are obviously complementary goods

The Auto and Steel Industry are linked.

So a shift in Demand or Supply in one will impact the other.

Putting it all together

YOUR FINAL TASK FOR ACTIVITY 3.4

After going through Activities 1, 2, and 3 you should have a better understanding of the interplay of Supply, Demand, Equilibrium, and Tariffs. Your final task for Activity 3.4 is to create your own theory, using supply and demand graphs, to predict the Economic consequences of a Government action

Click on the picture above to access the question

Activity 3.4 Module Test Putting your Knowledge to Use
150 Points

Go to the Assignment Area to Take and Submit this Test.

1. Complete the above requirements in Word or Write it out in pencil or pen if you do not know how to create the supply and demand graphs.

2.  You will have to attach this assignment if done in a spreadsheet program.

3.  Or you can fax the assignment to your instructor by using the fax number listed below.  Make sure to include your name, course name and assignment number.

 FAX Number : (559) 327-9343

 

 

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