International

Protectionism and free trade

Protection uses tariffs, quotas and subsidies to shield local producers from imports, while free trade leaves those barriers down.

CAPS

Grade 12 · Economics · International

Economics wants the concept, then the diagram or the data, then the consequence.

  • The papers

    Paper 1 is macroeconomics and economic pursuits. Paper 2 is microeconomics and contemporary economic issues. Each paper is 150 marks.

  • How to write it

    Define the term as CAPS uses it. If a graph is asked for, label both axes, the curves, and the equilibrium or the shift. Then say what happens to price, quantity, growth, inflation or unemployment. A curve with no labels does not explain.

  • How a marker reads it

    A common mix-up is calling a tariff a subsidy, when a tariff taxes the import and a subsidy pays the local producer.

Essays are marked on the introduction, a body that applies the theory, and a conclusion that answers the question. A list of definitions is not an argument.

ABN

Worked theory

Worked theory. South Africa has used tariffs on imported chicken. A tariff on imported frozen chicken raises the price of a pack in a township shop, say from R40 toward R55. A local broiler farmer near Delmas is protected, because the imported pack is no longer much cheaper than the local one, and the farm is more able to keep its workers. The household buying the pack pays the higher price. Free trade would have left the cheaper import on the shelf and put more pressure on the farm. The tariff moves the outcome toward the producer and away from the household, which is the protection trade-off.

More worked examples

  • Cape Town shirt quota

    A quota allows only a fixed number of cheap imported T-shirts into the country in a year. Once that number is filled, extra cheap shirts cannot come in, and local clothing workshops in Cape Town face less price pressure. Shops cannot stock as many bargains as they want, so buyers see fewer of them. A quota restricts quantity. It is not a tax added onto each shirt, which would be a tariff.

  • Free State maize payment

    Government pays a maize farmer in the Free State a subsidy so a bag can be sold closer to the imported price and still cover the farmer's costs. The shop price need not jump the way it does under a tariff. Taxpayers fund the payment. The farmer is protected by money received, not by a tax on the foreign bag. Free trade without the subsidy would leave the farmer facing the full world price.

In ordinary words

A tariff is a tax on an import and raises the shop price, a quota limits how much may be imported, and a subsidy pays local producers so they can cover costs or match a low world price. Free trade lets buyers import without these barriers and pay the world price. Protection can keep a local industry and its jobs, and the cost lands on households as a higher price or on taxpayers if the tool is a subsidy. The gain and the cost do not land on the same people.

In South Africa

A township freezer holds frozen chicken at a higher price, while a broiler farm near Delmas keeps its workers.

Part 1 / 4

What it is

Protection uses tariffs, quotas and subsidies to shield local producers from imports, while free trade leaves those barriers down.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

A car costs $20 000 abroad; R18/$; import tariff 25%. Calculate the landed price in rand.

4. Step-by-step working

  1. 01

    Multiply

    20 000×18=R360 000.

  2. 02

    Multiply

    360 000×1,25=R450 000.

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: A car costs $20 000 abroad; R18/$; import tariff 25%. Calculate the landed price in rand.

Before any working — hunt first

Given

Numbers and units already in the sentence: 20 · 000 abroad · R18/ · 25%. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: the landed price in rand. Circle that word — that is the missing variable.

Find

We are required to find: the landed price in rand. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

What we need to calculate: Convert, then add tariff. Then substitute the given, one line at a time, to get the landed price in rand.

In other words — as if you have never seen this before

If you have never seen this before: Convert, then add tariff. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

$20 000; R18$; 25% tariff.

3. Which method — and why this one?

Convert, then add tariff.

4. Step-by-step working

  1. 01 / 05

    Multiply

    20 000×18=R360 000.

    Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.

  2. 02 / 05

    Multiply

    360 000×1,25=R450 000.

    Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.

  3. 03 / 05

    Step G — Sense-check the size

    Ask: is this the kind of number a Grade 10–12 paper would want? A speed of 3 000 ms for a learner walking, or a probability bigger than 1, means a unit or algebra slip. Estimate first: round the numbers and do the sum in your head.

    Why this step: Markers write ‘unrealistic’ in the margin when the method is right but the size is wild. A 10-second head check often finds a missing 10² or a unit that never changed.

  4. 04 / 05

    Step F — Box the answer with its unit

    R450 000.

    Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.

  5. 05 / 05

    Step H — What the marker is looking for

    On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.

    Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

R450 000.

Copy onto your answer sheet — in this order

Answer: R450 000.

6. Check it like a marker

Tariff adds R90 000.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

Ntsako · fx-991ZA PLUS. Tap to calculate.