Which of the following best describes quotas?

Quotas represent a specific type of trade barrier that directly limits the quantity of a particular good that can be imported into a country during a given timeframe. By establishing this numerical restriction, quotas aim to protect domestic industries from foreign competition by controlling the supply of foreign goods in the market. This can result in higher prices for consumers, as the availability of imported goods is reduced, thereby encouraging local production and sales. Quotas are practical tools for governments to regulate trade and protect domestic economic interests.

The other options referenced do not accurately define quotas. Taxes on imports are known as tariffs, which function differently from quotas as they impose a cost rather than limit quantity. Incentives for exporting goods refer to policies or benefits aimed at encouraging domestic producers to sell their products abroad, which does not relate to import restrictions. Voluntary agreements between countries concern arrangements that may limit trade but differ from the direct quantity limits imposed by quotas. Thus, the characterization of quotas as limits on import quantities is the most accurate and aligns perfectly with the established understanding of this trade mechanism.