Question

Distinguish between Tariffs and Quotas.

Hint:

Tariffs = Price barrier; Quotas = Quantity barrier. Both restrict imports but in different ways.

Answer 1

Tariffs	Quotas
Tariffs are levies applied to imported merchandise.	Quotas are quantitative restrictions on imported goods.
They increase the cost of foreign goods, diminishing their competitiveness.	They limit the availability of imports directly, irrespective of price.
Yield revenue for the state.	Do not yield immediate income.
Permit continued importation upon payment of the increased charge.	Halt imports entirely when the quota threshold is met.
Illustration: A 10% duty on imported mobile phones.	Illustration: A cap of 100,000 tonnes on sugar imports annually.