Trade Barriers: Quantity Limits on Imports

Steps:

• Recall that trade restrictions include tariffs (taxes) and non-tariff barriers like quotas.
• Identify the question focuses on quantity limits, not prices or subsidies.
• Match "restriction on quantity of imports" to the definition of a quota.
• Eliminate options unrelated to quantity controls.

Why B is correct:

• A quota is a government-imposed limit on the physical amount of a good that can be imported, directly restricting quantity to protect domestic industries.

Why the others are wrong:

• A. Dumping involves exporting goods at below-market prices to gain market share, not limiting quantities.
• C. Subsidy is financial support from a government to domestic producers, encouraging exports rather than restricting imports.
• D. Tariff is a tax on imported goods that raises their price, affecting cost but not directly limiting quantity.

Final answer: B