Question 1
AARP lobbies aggressively for the interests of retired persons. For example, AARP has been instrumental in obtaining medical benefits for senior citizens. Such behavior on the part of AARP is called
◦ government failure.
◦ discrimination.
◦ consumer loss.
◦ rent-seeking behavior.
Question 2
Government failure
◦ leads to a more efficient allocation of resources.
◦ leads to a less efficient allocation of resources.
◦ occurs because households or firms do not act in their own self‐interest.
◦ occurs because government officials do not act in their own self‐interest.