The welfare costs of rent seeking will approximate _____
a. the value of the resources expended in lobbying
b. the deadweight loss of taxation
c. the value of the rent-seeking benefits
d. zero if political markets are perfectly competitive
c
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As part of its proposal to win the 2012 Olympics, London developed a carbon offset plan to reduce the Games' impact on the environment. In 2011, the organizers decided to drop this plan to reduce emissions. We can conclude that
A) the marginal cost of reducing emissions exceeded the marginal benefits of reducing emissions. B) the organizers are not making a rational decision. C) the organizers are ignoring a sunk cost. D) there are no incentives to reduce carbon emissions. E) it is difficult to calculate the cost of reducing emissions.
Health problems prevent people from working harder, which can lower a country's total income. This indicates that in effect, health problems
A) shift a country's production possibilities frontier inward. B) increase the incentive to work. C) decrease consumer surplus. D) are a primary cause of price decreases.