What is an import barrier that sets limits on the amount of a product that can be imported?

An import barrier that limits the amount of a product that can be imported is known as a quota. Quotas directly restrict the quantity of a specific good that can be imported over a set period, thereby controlling supply and often protecting domestic industries from foreign competition. By setting a maximum limit on imports, quotas can help maintain higher prices for domestic producers and encourage consumption of locally made goods.

In contrast, a tariff is a type of tax imposed on imported goods, making them more expensive and thus less competitive relative to domestic products, but it does not limit the quantity that can be imported. Comparative advantage refers to the ability of a country to produce a good at a lower opportunity cost than another, indicating a focus on specialization in trade rather than import limitations. Absolute advantage focuses on the efficiencies of production without implying restrictions, which is separate from the concept of quota. Understanding the distinction among these terms is crucial in comprehending how trade policies influence international commerce.