The Redwood City Council has decided that there is an overallocation of resources in the lawn-care industry. Almost every homeowner owns a lawnmower, hose and sprinkler, seeder, spreader, etc., and these items are used, at most, once a week. The council
will establish a legal monopoly and select a private firm that will be responsible for all lawn care in the city. What types of rent-seeking activities can be expected as a result of this action?
As firms vie for this contract, they will attempt to garner the support of the individual council members. Lobbyists and attorneys might be hired and other resources expended by firms seeking the contract. In the end, only one firm will "win" the contract, and the lobbying efforts of the other firms will have been in vain and an unproductive use of the resources.
You might also like to view...
What sort of productivity shocks would cause lower real wage growth and result in lower growth in labor productivity?
A) productivity shocks which decrease supply of labor given the demand for labor B) productivity shocks which increase supply of labor given the demand for labor C) productivity shocks which increase demand for labor given the supply of labor D) productivity shocks which decrease demand for labor given the supply of labor
When an employee at a grocery store scans the price of your items, bags the groceries, and collects your paper, the individual has provided
A) physical capital. B) entrepreneurship. C) a service. D) land.