Which of the following is the best example of a quota?
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A. B. C. D. E.Explanation
An import quota is a specific quantity (or value) of a good permitted to be imported into a country during a given year.
The best example of a quota among the given options is B. a limit imposed on the number of men's suits that can be imported from a foreign country.
A quota is a trade barrier that restricts the quantity or volume of goods or services that can be imported or exported. It is a government-imposed restriction that sets a specific limit on the quantity of a particular product that can be traded. Quotas are often used to protect domestic industries from foreign competition or to manage the balance of trade.
Option B describes a situation where a limit is imposed on the number of men's suits that can be imported from a foreign country. This means that only a certain number of suits can be brought into the domestic market from abroad. By setting a quota, the government aims to control the amount of foreign suits entering the country and protect domestic producers of men's suits. This restriction can help the domestic industry by reducing competition from imports and potentially supporting local businesses and employment.
The other options do not represent examples of quotas:
A. a tax placed on all small cars sold in the domestic market: This option describes a tax, not a quota. It is a form of trade barrier, but it does not restrict the quantity of imports.
C. a $100-per-car excise tax levied on all small cars sold in the domestic market: This option also describes a tax, not a quota. It is an additional tax imposed on small cars sold domestically, which affects both domestic and imported cars.
D. a subsidy from the U.S. government to domestic manufacturers of small cars so they can compete more effectively with foreign producers of small cars: This option describes a subsidy, not a quota. It involves financial support provided to domestic manufacturers to improve their competitiveness against foreign producers.
E. a $100-per-car fee imposed on all small cars imported: This option describes a fee, not a quota. It represents an additional cost imposed on imported small cars, but it does not restrict the quantity of imports.
Therefore, option B is the best example of a quota as it involves a specific limit on the number of men's suits that can be imported.