A few hundred U.S. sugar makers lobby the U.S. government each year to make sure that the government taxes imported sugar at a high rate. They do so because the policy drives up the domestic price of sugar and increases their profits. It is estimated that the policy benefits U.S. sugar producers by about. $1 billion per year while costing U.S. consumers upwards of $2 billion per year. Which of the following concepts apply to the U.S. sugar tax? a. Political corruption. b. Rent-seeking behavior. c. The collective-action problem. d. The special-interest effect.

A few hundred U.S. sugar makers lobby the U.S. government each year to make sure that the government taxes imported sugar at a high rate. They do so because the policy drives up the domestic price of sugar and increases their profits. It is estimated that the policy benefits U.S. sugar producers by about. $1 billion per year while costing U.S. consumers upwards of $2 billion per year. Which of the following concepts apply to the U.S. sugar tax? a. Political corruption. b. Rent-seeking behavior. c. The collective-action problem. d. The special-interest effect.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter12: The Partial Equilibrium Competitive Model

Section: Chapter Questions

Problem 12.10P

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