IB Econ Quotas

Welcome to Your IB Quota Hub

Import quotas are one of the most exam-tested types of trade protection in IB Economics. Unlike tariffs, quotas limit the actual quantity of a good that can enter a country - shifting supply curves, affecting prices, and creating political tension in the real world.

This page gives you one place to revise it all—with links to examples, diagrams, and analysis.

Start Here: What Is an Import Quota?

• Quotas: When Countries Say "Enough is Enough!" to Imports

Discover how import quotas affect prices, producers, and your shopping options! Perfect guide for IB Economics students with real examples and exam tips.

Import quotas | Trade restrictions | Protectionism | Welfare effects of quotas | Quota examples | Quota calculations | International trade barriers

• Definitions of import quotas

• How quotas differ from tariffs

• Government motives for using quotas

• Real IB-style example (e.g. quota on steel imports)

Diagrams: Drawing the Quota Curve

• Quotas: When Countries Say "Enough is Enough!" to Imports

This post covers:

• Step-by-step labelled diagram

• Domestic price increase

• Deadweight loss areas

• Government vs foreign producer gains

Perfect for Paper 1 prep.

HL Focus: Elasticity and Quotas

Explore how:

• Quotas work differently in elastic vs inelastic markets

• Evaluating their real impact requires HL-level thinking

• Firms respond through lobbying, non-price competition, or foreign investment shifts

Calculating Quotas in IB Economics

In Paper 1 or Paper 3, you may be asked to calculate the impact of a quota on market supply or price - especially at HL. Here’s how to approach it using your diagrams and logic.

Step-by-Step Example

1. Start with the free trade quantity:
   At world price (Pw), imports = Qd - Qs

2. Apply the quota:
   A physical limit (e.g. only 200,000 units allowed)

3. New price rises due to the quota restricting supply → use supply curve to find new equilibrium

4. Foreign producer surplus = area of price difference × quota quantity
   (Only foreign firms inside the quota gain)

5. Deadweight loss = two triangles

   • One from lost consumer surplus

   • One from inefficient domestic production

6. Government revenue?
   Not applicable in quotas unless there’s an auction or licence fee (Unlike tariffs - this is an exam favourite mistake to avoid)

IB Tip:

Use proper units (e.g. tonnes, bananas, wool), label all shaded areas on the diagram, and comment on elasticities if possible for HL evaluation marks.

Real-World Case Studies

UK Steel Import Quotas (2022–2024)
In 2022, the UK extended steel quotas to shield its domestic industry post-Brexit. It led to higher prices, criticism from EU partners, and debate over competitiveness.
Use this when discussing quotas as a non-tariff barrier and its political implications.

China–Australia Wool Quota
China imposed quota limits on Australian wool, partly due to trade tensions. Farmers faced reduced demand and income volatility.
Use this when evaluating quotas based on geopolitical motivations and unintended consequences.

EU Banana Import Quotas (Historical)
The EU limited banana imports to protect Caribbean producers under trade agreements, triggering WTO disputes.
Use this when discussing trade quotas and WTO conflict.

Evaluation: Strengths and Limitations of Quotas

Includes:

• Consumer impact

• Producer gain

• Efficiency vs equity

• WTO legal framework

• Use this for 10- or 15-mark exam answers.

Related Pages and Topics

• IB Tariffs Page

• Trade Protection Overview

• Economic Integration and Trade Blocs

• Comparing Quotas and Tariffs (check quotas page and tariffs page)

For access to all key diagrams, model answers, and exam strategies,

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