Financial Contributions to the Campaigns of Members of Congress, State

question 32

Multiple Choice

Financial contributions to the campaigns of members of Congress, state legislators, and other elected officials by firms that seek special interest legislation that make the firms better off are

• A)examples of rent seeking.
• B)illegal.
• C)the result of the voting paradox.
• D)irrational because elected officials will almost always act in the interest of the voters who have to pay the cost of the legislation.

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Definitions:

Reservation Price

The maximum or minimum price at which a consumer is willing to buy or sell a good or service.

Elastic Demand

A situation where the demand for a product or service significantly changes in response to a change in price.

Regulated Monopoly

A monopoly that is allowed to operate by the government under set conditions and regulations to ensure fair competition and protect consumers.

Regulation Dilemma

The challenge of finding the balance between necessary governmental regulations and the freedom for businesses to operate efficiently.