Network Proxy for Development

Recently, when I was working on a desktop application, I wanted to test it's usability when certain APIs fail. For this I wanted to block a certain API, but couldn't find a simple straightforward way to do this. Maybe I could've done something with the /etc/hosts file, but wasn't able to make it do what I want. This got me thinking about developing a simple application, which creates a proxy to which we can connect to, and it allows us to blacklist urls. ( Further features can be defining the time taken by the API to respond back, setting a status code it responds back with etc )So, I have a few questions -

1. Is there a simple solution which allows us to do this ? 2. Do you think the solution is technically feasible ? 3. Would you be willing to use an application like this ? If Yes, What are some other use cases of the solution and what features do you think it should have ?