When considering rent seeking, which of the following is true?
A)The anti-free trade group generally will lobby more than the pro-free trade group.
B)The pro-free trade group generally will lobby more than the anti-free trade group.
C)Usually only the anti-free trade group is concerned about what is best for society at large.
D)Only the pro-free trade group is concerned about the government's revenue from tariffs.
E)Rent seeking is the primary reason why consumers gain from free trade.

Question

Quizplus · Accepted Answer

Rent seeking refers to the act of seeking benefits from the government through the political process, such as lobbying. Generally, those who stand to benefit the most from protectionism (anti-free trade groups) will lobby more intensely than those who stand to benefit from free trade (pro-free trade groups). This is because the anti-free trade group faces competition from foreign producers, while the pro-free trade group benefits from access to a larger market. Therefore, they have less incentive to engage in rent seeking.

The other options are incorrect. Choice B is incorrect because the pro-free trade group has less incentive to lobby due to their already existing benefits from free trade. Choice C is incorrect because both groups are concerned with their own interests, rather than what is best for society as a whole. Choice D is incorrect because the pro-free trade group is not concerned with government revenue from tariffs, as they generally believe in free trade without government intervention. Choice E is incorrect because rent seeking is a negative aspect of trade that reduces overall gains from trade, rather than the primary reason for gains from trade.

When Considering Rent Seeking, Which of the Following Is True