In Kubernetes, resource quotas are a key method for managing resources and preventing applications from consuming excessive amounts of CPU, memory, or storage. They work by setting limits on the total number of objects, total resource requests, and total resource usage levels permissible within a given namespace. Resource quotas can be used to manage compute resources, storage resources, object count resources, and extended resources. They offer several advantages, including improved resource utilization, simple limit configurations, and granular controls, but also have some drawbacks, such as complexity, limitations on application performance, and limited granularity. To get the most out of resource quotas, it's recommended to set up namespaces strategically, start high and scale down, monitor and adjust quotas, include both resource requests and limits, and use tools like groundcover for comprehensive visibility into resource usage.