Rent-seeking activities are socially wasteful because they use scarce resources but do not add to society's output.

Question

Quizplus · Accepted Answer

Rent-seeking activities, such as lobbying for government subsidies or monopolistic practices, divert resources away from productive activities and create inefficiencies in the economy. This results in a net loss for society as a whole as output is not increased despite the allocation of resources.

Rent-Seeking Activities Are Socially Wasteful Because They Use Scarce Resources