What is "rent seeking"? How does it apply to restricting imports?
What will be an ideal response?
Rent seeking is lobbying and other political activity that seeks to capture the gains from trade. When imports are restricted, some people gain from the restrictions. Rent seekers, such as domestic producers of import-competing goods or services, lobby the government to impose import restrictions because restrictions allow the rent seekers to gain revenue and/or profit.
You might also like to view...
Which of the following is not a benefit of the unitary form (Uform) of an organization?
A. Opportunity costs of the time of senior management B. Improved coordination among functional specialists C. Higher level of functional expertise D. Well-defined promotion path
If a country is net exporter, free trade will hurt the ________.
A. poor citizens of the country B. domestic consumers C. domestic producers D. rich citizens of the country
The total revenue of Grandma's Fudge Factory is equal to the:
A. average cost times quantity sold. B. elasticity of demand divided by percentage change in quantity. C. price of fudge times quantity sold. D. income minus explicit and implicit costs.
If wages do not fully adjust to changes in prices, the aggregate supply curve is vertical.
Answer the following statement true (T) or false (F)