Which of the following is the best example of a quota?
A) a limit imposed on the number of sport utility vehicles that the United States can import from Japan
B) a subsidy granted by the U.S. government to domestic garment manufacturers so they can compete more effectively with foreign garment manufacturers
C) a tax placed on all sport utility vehicles sold in the domestic market
D) a $5,000 per-car fee imposed on all sport utility vehicles imported into the United States

Question

Quizplus · Accepted Answer

A quota is a limit on the quantity of a particular good that can be imported/exported. In this case, the limit imposed on the number of sport utility vehicles that the United States can import from Japan is an example of a quota. Option B is an example of a subsidy, option C is an example of a tax, and option D is an example of a tariff.

Which of the Following Is the Best Example of a Quota