Question

When subsidies, tax credits, and government favoritism are increasingly used to allocate goods and services,

a.lobbying activities will increase.

b.contributions for political campaigns will increase.

c.political corruption will become more widespread.

d.All of the above are true.

When the government is heavily involved in projects that provide benefits to some businesses at the expense of others, this will increase the incentive of businesses to

a.develop better products in order to satisfy consumers.

b.invest in projects that increase the value of the resources.

c.spend more time lobbying and seeking government favors.

d.spend less time lobbying and seeking government favors.

Answer 1

Solution-

When subsidies, tax credits, and government favoritism are increasingly used to allocate goods and services,

The correct option is D. All of the above are true.

When the government is heavily involved in projects that provide benefits to some businesses at the expense of others, this will increase the incentive of businesses to spend more time lobbying and seeking government favors.

The correct option is C. spend more time lobbying and seeking government favors.