When imports are restricted with quota rather than a tariff, the cost is sometimes magnified by a process known as _______.

Correct option is A

The correct answer is: (A) Rent seeking

Explanation:
When a country restricts imports using quotas instead of tariffs, it limits the quantity of a good that can enter the country. In such scenarios, individuals and firms may compete for the valuable licenses or permits to import the restricted quantity. This competition often takes the form of lobbying, bribery, or manipulation of policy—activities that fall under rent-seeking behavior.

Rent seeking refers to the practice of trying to increase one's share of existing wealth without creating new wealth. In the context of quotas, rent-seeking occurs as firms expend resources not to increase productivity but to obtain the restricted import rights. This adds to the economic cost of using quotas over tariffs because, in addition to the deadweight loss from limiting imports, there are extra costs due to unproductive activities aimed at securing import licenses.