Examples of Quotas in the following topics:
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- There are two main types of import quota: the absolute quota and the tariff-rate quota.
- A tariff-rate quota is a two-tier quota system that combines characteristics of tariffs and quotas.
- Often, quotas are instituted to:
- Quotas may also encourage smuggling.
- As quotas raise the price of domestic goods, it becomes profitable to try and circumvent the quota by bringing in goods illegally, or in excess of the quota.
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- Government can promote free trade by reducing tariffs, quotas, and non-tariff barriers.
- Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports), subsidies (to exports), or quotas.
- Tariffs and quotas are explicit government policies that are designed to protect domestic producers, even if they are not the most efficient producers .
- In addition to tariffs and quotas, there are a number of other barriers to free trade that countries use.
- NTBs act just like tariffs and quotas in that they are barriers to free trade.
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- To prevent over-fishing, a negative externality, governments may impose individual fishing quotas (IFQs), which set an allowable catch limit for fisheries.
- To address the problem of negative externalities, governments may use a quota system to try and limit them.
- In a quota system, the negative externality is capped at a certain amount.
- In the example of pollution, the government may put a quota on the amount of pollution a factory can produce by issuing tradable permits.
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- Import Quotas: Policy makers often implement quotas in agriculture to retain more control over prices and protect domestic incumbents.
- Quotas, like other forms of trade protection, benefit the local industry.
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- Free trade policies consist of eliminating export tariffs, import quotas, and export quotas; all of which cause more losses than benefits for a country.
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- Governments can institute any number of policies that prevent markets from achieving the free market equilibrium price and quantity: taxes raise prices, quotas limit the quantity sold, and regulations affect the supply and demand curves.
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- This can happen through price floors, caps, taxes, tariffs, or quotas.
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- At times in its history, the country has had a strong impulse toward economic protectionism (the practice of using tariffs or quotas to limit imports of foreign goods in order to protect native industry).
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- In this scenario, government policies may set quotas, or import limits, to reduce supply.
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- Protectionism is the economic policy of restraining trade between countries through tariffs on imported goods, restrictive quotas, and government regulations.