In the text we discussed how rent seeking is one of the costs of government intervention. Consider
Question:
a. Explain why economists call such lobbying "rent seeking."
b. Suppose the farmers spend $500 000 in their lobbying efforts but have no effect on government policy. What is the cost to society of the rent seeking? Explain.
c. Suppose the $500 000 of lobbying does lead to a change in government policy. Now what is the social cost of the rent seeking?
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Related Book For
Microeconomics
ISBN: 978-0321866349
14th canadian Edition
Authors: Christopher T.S. Ragan, Richard G Lipsey
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