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1 April, 23:50

Suppose American winemakers convince the federal government to issue a directive to serve only domestically produced wine at government functions. This would be an example of Multiple Choice moral hazard. the principal-agent problem. logrolling.

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  1. 2 April, 00:27
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    Complete Question:

    Suppose American winemakers convince the federal government to issue a directive to serve only domestically produced wine at government functions. This would be an example of Multiple Choice moral hazard. the principal-agent problem. logrolling. rent-seeking behavior.

    Answer:

    rent-seeking behavior.

    Explanation:

    A rent-seeking behavior can be defined as a concept in economics that usually involves an individual or business entity seeking to increase their wealth without a reciprocated additional benefits, wealth or being productive to the country at large.

    Rent seeking is an economical concept that originated from the work of the father of economics, Adam Smith.

    Simply stated, rent-seeking behavior involves the pursuit of added wealth through government at the expense of the society. Individuals or business entities are much more concerned with obtaining financial gains and benefits through the inefficient allocation of economic resources, which is largely detrimental to the people in the society.

    For instance, American winemakers convincing the federal government to issue a directive to serve only domestically produced wine at government functions.

    Also, some other examples of rent-seeking behaviors are cab licensing, grants, lobbies, tariffs, and government subsidies.
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