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15 November, 12:13

Rent seeking is an attempt to

A. use the government for individual benefit at the expense of others. Regulatory capture is an example of this, where a regulatory agency makes decisions benefiting the firm being regulated.

B. use the government to improve economic efficiency. Regulatory capture is an example of this, where a regulatory agency improves economic efficiency.

C. use the government for individual benefit at the expense of others with rational ignorance. Regulatory capture seeks to achieve the same objective with logrolling.

D. use the government to improve economic efficiency. Regulatory capture is an example of government failure, where the government reduces economic efficiency.

E. represent underlying voter preferences with majority voting. Regulatory capture is an attempt to represent underlying voter preferences with government regulations.

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  1. 15 November, 12:30
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    Answer: A

    Explanation: Rent seeking is an economic term whereby an entity seeks to use the Government regulations to their own benefit / advantage.

    It is a term used when an entity is seeking benefits for themselves through the political means like grants and subsidies.

    Rent seeking is known to cause limited competition in the market and market entry barriers.
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