Assume that the owners of the only gambling casino in Wisconsin spend large sums of money lobbying state government officials to protect their gambling monopoly. Economists refer to these expenditures as
A) rent-seeking.
B) price discrimination.
C) X-efficiency.
D) network effects.

Question

Quizplus · Accepted Answer

Rent-seeking refers to the expenditure of resources (such as money, time, and effort) by individuals or firms to influence government policies or regulations in order to increase their own profits. In this case, the casino owners are spending money to protect their gambling monopoly, which is an example of rent-seeking behavior. Price discrimination refers to selling the same product at different prices to different consumers, while X-efficiency refers to the ability of a firm to minimize its costs and operate efficiently. Network effects refer to the phenomenon where the value of a product or service increases as more people use it.

Assume That the Owners of the Only Gambling Casino in Wisconsin