Question 7 [12]

7.1. Explain what a price support is. (2)

7.2. Explain what a production quota is. (2)

7.3. Explain what an import quota and an import tariff are. (2)

7.4. Interpret the diagram below and discuss what exactly it is reflecting in terms of the

society as a whole, the government and the cost to it, as well as the profit or loss to

producers. (6)