Rent Seeking

question 207

Multiple Choice

Rent seeking

• A) increases consumer surplus.
• B) occurs only when the firm practices perfect price discrimination.
• C) increases deadweight loss.
• D) results in a larger output than a competitive industry would produce.

Identify the basic motives that drive human values and distinguish between different types of values.

Recognize the universal values accepted across cultures and their significance.

Analyze the influence of culture on moral values and social behavior.

Distinguish between strong and weak situations and their impact on norms for behavior.

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Definitions:

Industrial Regulation

Oversight and rules established by government agencies to govern how businesses can operate in certain industries to promote fair practices and competition.

X-inefficiency

A situation where a firm operates with higher than necessary costs due to a lack of competition or other inefficiencies, not achieving maximum productivity.

Principal-agent Problems

Conflicts of interest and challenges in monitoring that arise in relationships where one party (the agent) is supposed to act in the best interest of another (the principal).

Paradox of Voting

The situation where individual rationality leads to a collective decision that is worse for everyone involved.