assistance (as they have done in the past when the world price of
pork declined steeply).
a. Explain why economists call such lobbying “rent seeking.”
b. Suppose the farmers spend $500 000 in their lobbying
efforts but have no effect on government policy. What is
the cost to society of the rent seeking? Explain.
c. Suppose the $500 000 of lobbying does lead to a change in
government policy. Now what is the social cost of the
rent seeking?
rishikesh
(rishikesh)
#1