Question

If a quota license is awarded to a domestic firm without an auction, it may generate bribes or lobbying spending to earn this revenue. Economists call this a(n) ____ activity.

Answer 1

Answer:

c) wasteful rent-seeking

Explanation:

Rent-seeking is an economic activity that does not add any value, and it often includes lobbying and spending resources of your own company. This is a common practice when companies cannot find another feasible revenue stream, so they manipulate the distribution of various resources to gain wealth. This way, no value is created.