Protectionist Subsidies and Evaluating Protectionism

A final tool available to government for promoting domestic production over imports is the protectionist subsidy. This less will explain, illustrate and evaluate the impact of a payment from the government to domestic producers meant to reduce imports and protect domestic jobs and firms.
This lesson also examines the economic justification for protectionism.
Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! econclassroom.c...

[@morfeen]

That was an excellent video. I'm an economics teacher and I can say this is the best video out there explaining the effect of a protectionist subsidy.

[@JackDoyle-k7w]

that's why he's the goat

[@matteogabrielmecattaf673]

I really appreciate how organised and clear your lesson was. Thank you!

[@nataliesvt]

thank you so much for this video, you don't know how much you saved me for my economics exam !!

[@dars861]

Thank you this vid has everything I needed to know and that all other videos dont, thank you!

[@simonneguilherme4998]

Thanks a lot Jason for these videos on Types of Protectionism! It helped me immensely since I teaching IB Econ for the first time! I also use the textbook you wrote with Sean Maley as our class resource. Sometimes I assign the worksheets to students, the ones they can access with the link, however I would like to know if there is any key to them, maybe not all but to some at least... Sometimes I feel that having a key could help me , help my students. Thanks

[@JasonWelker]

Hi Simonne, I suggest you check out the worksheets with answer keys I sell through my website. They are infinitely more useful and relevant than the ones that Pearson provides. Welker's Wikinomics and follow the link to the practice activities.

[@dreamer-ak10]

Thank you. You are great explainer.

[@SuyashMohan20]

Hey Jason,
You said in the video that the difference between the Government expenditure and the producer revenue shows the welfare loss in society. My question is, that area, which is the welfare loss is covered by consumer surplus, so why is it counted as welfare loss? There has been no change in consumer surplus either.

[@r.a.p5121]

Shouldn't the area above Sk with subsidy up till World Price also be part of Producer Surplus?

[@aminzairi51]

great explanation very clear n organized

[@plizzy6844]

Wow it finally makes sense

[@ltdh05]

Hi,
Why is the producer surplus still above the first supply curve if the supply curve shifted ?

[@JasonWelker]

You could also show producer as below the price consumers pay and above the "S with subsidy" curve. This would yield the same area as the triangle I outlined, because the vertical distance between the old supply curve and the new supply curve is the amount of the subsidy, which is the same as the vertical distance between the Pw and the Ps (since the subsidy is a payment to producers above what consumers pay)
The reason I outline the area I do is twofold: It's really easy to see the INCREASE in producer surplus resulting form the subsidy and it's really easy to compare the total benefit of the subsidy (which is the increase in PS) and the total cost of the subsidy (the black rectangle in this graph).

[@rmo4762]

thx. which band is playing at the beginning? :)

[@victoremilmadsen1669]

Making Me Nervous by Brad Sucks

[@wonderjennie8714]

☺