ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A quota is a government-imposed trade restriction that limits the number or monetary value of goods that a country can import or export during a particular period. Countries use quotas in international trade to help regulate the volume of trade between them and other countries.

Detailed explanation-2: -An import quota lowers consumer surplus in the import market and raises it in the export country market. An import quota raises producer surplus in the import market and lowers it in the export country market. National welfare may rise or fall when a large country implements an import quota.

Detailed explanation-3: -Tariff-Rate Quotas There is no limitation on the amount of merchandise that may be imported into the United States, however, quantities entered in excess of the quota limit during that period are subject to a higher duty rate.

Detailed explanation-4: -(i) Tariff or Custom Quota: In the case of tariff or custom quota, a certain specified quantity of a commodity is allowed to be imported by the government of the importing country either duty free or at a low rate of import duty.

Detailed explanation-5: -The Bilateral Quota: Under this system, quotas are set through negotiation between the importing country and the exporting country (or foreign export groups).