Question 22N.3.HL.TZ0.a.iii
| Date | November 2022 | Marks available | [Maximum mark: 2] | Reference code | 22N.3.HL.TZ0.a.iii |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Calculate | Question number | a.iii | Adapted from | N/A |
Figure 2 illustrates the daily world price of wheat in US dollars (US$) per kilogram from August 2020 to February 2021.
Figure 2
On 17 December 2020, Turkey eliminated a 20 % tariff it had imposed on wheat imports from Russia. Russia had recently decided to introduce a tax on its wheat exports. Turkey is the largest flour exporter in the world and Turkish flour exporters buy 85 % of the wheat they need in their production process from Russia.
[Source: Hürriyet Daily News, 2020. Turkey extends zero-tariffs on wheat imports to April [online] Available at:
https://www.hurriyetdailynews.com/turkey-extends-zero-tariffs-on-wheat-imports-to-april-160933 [Accessed
29 September 2021] Source adapted.]
Figure 3 illustrates the Turkish wheat market. Before the 20 % tariff was eliminated, the price for wheat in Turkey was US$7.20 per kilogram. S is domestic supply, D is domestic demand, Sw is world supply and St is world supply with the tariff.
Figure 3
Using Figure 3, calculate the change in social/community surplus that resulted from the elimination of the 20 % tariff.
[2]
6 1.2 0.5 = 3.6
6 1.2 0.5 = 3.6
Any valid working is sufficient for [1].
3.6 + 3.6 = $7.2 million
An answer of 7.2 without workings is sufficient for [1]. For full marks to be awarded, the response must provide valid working and include correct units.
An alternative approach which may be rewarded is to calculate the net change in CS + PS only
Change in CS = 0.5 1.2 (64 + 70) = 80.4
Change in PS = 0.5 1.2 (30 + 36) = 39.6 (decrease)
Any valid working is sufficient for [1].
Change in social surplus = 80.4 39.6 = $40.8 million
For full marks to be awarded the response must provide valid working and include correct units.
The most common approach was to calculate the net change in consumer surplus, producer surplus and government revenue (by calculating the area of two triangles) providing an answer of $7.2 million. However, the subject guide specifies social/community surplus as consumer surplus plus producer surplus, so candidates who did not include tax revenue in their calculation and provided an answer of $40.8 million were fully rewarded. Lower-achieving responses tended to embark on calculations of initial and final consumer and producer surplus, making errors in the process.
