9. Special interest groups, lobbying, and rent-seeking behavior Large defense co
ID: 1117232 • Letter: 9
Question
9. Special interest groups, lobbying, and rent-seeking behavior Large defense contractors often produce items such as tanks and warplanes that even the Department of Defense doesn't think are necessary. A government watch-dog group has identified one such warplane that is no longer needed and has pushed for a new bill eliminating the plane. Eliminating it could save taxpayers $15 billion but the two large companies producing the plane would stand to lose $10 billion in joint profits. Answer the following questions regarding this possible law. From the standpoint of economic efficiency, eliminating the plane is economically Eliminating the production of the plane would create Because the small number of plane producing companies would be villing to spend up to to keep the plane in production, while the millions of taxpayers would likely either not know about the policy or would not find it worthwhile to lobby, the special interest issue of eliminating these planes would probably in expenditures to lobby the government if subjected to political decision making.Explanation / Answer
1. Beneficial as it will save 15 billion of the state exchequer.
2. unemployment since firm will lose 10 billion in sales, they will have to lay off workers.
3.10 million and this will half the passage of the law.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.