In what ways are quotas and numerical restrictions similar yet different? Provide an example.
Numerical restriction is also known as tariff, which means the main difference is that a tariff is charged on goods that are imported. Quota means the government makes a limit of quantity on a certain product. Tariffs generate a lot of profit for the country, and raise the GDP. Quota has no effect on the GDP. Also as a result, tariff makes the consumer surplus fall and the producer surplus rise. In the quota, the consumer surplus falls only. In quota, importers or traders will make extra money from the collection, but tariffs, the revenue goes to the country.
An example of both: using a quota, the United States can restrict South Korea to import cars by saying it can only import 5% of total consumption every year. In tariffs, the United States can put restriction on South Korea to import cars by putting a tax which is 15%.