Rent-seeking behavior results in
a. increased economic activity by promoting efficiency.
b. lower economic activity by diverting resource to less-productive uses.
c. a more equitable distribution of income and wealth.
d. lower prices throughout the economy.
e. greater income and wealth in the private sector.
B
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We study the simple model of competitive markets because it helps to:
A. provide useful insights to markets that are not perfectly competitive. B. show how the government controls the economy. C. indicate whether buyers or sellers matter more. D. show how poorly the economy actually functions.
At various times, the United States has undergone the painful process of reducing military spending. Military bases from the Carolinas to California pleaded to be spared, citing huge job losses if they close. How can one rationally decide which bases to shut down, given the necessity of jobs?
Senator Dogood is pushing for the construction of a new military base in his state even though, from the standpoint of national security, it is clear that there are better places to locate the new military base. Economic theory would suggest that Senator Dogood is
a. acting irrationally; he must not know that the base would be better located in a different state. b. acting rationally; he realizes that constructing the base in his state will increase his chances of getting reelected. c. acting rationally if the country is currently at war but is acting irrationally if the country is not at war. d. trying to do what is best for the country.
If you can consume a good at the same time that others consume the same good, the good is nonrival in consumption.
Answer the following statement true (T) or false (F)