Ch 9 - Land and agriculture

Question 1

The share of agriculture in GDP and employment ________ as countries develop

Answer 1

Decreases

Question 2

Land is an asset and holding reflect ______

Answer 2

Wealth inequality

Question 3

You expect higher productivity from larger farms relative to smaller ones due to _________

Answer 3

Economies of scale

Question 4

What are 3 types of tenancy contracts?

Answer 4

Wage contracts, fixed rent contracts, sharecropping

Question 5

Higher potentials gains or lower cost of effort leads to ____ effort

Answer 5

Higher

Question 6

What does the incentive compatibility constraint represent?

Answer 6

The level of effort that will be chosen by the tenant, given the contractual payments

Question 7

What the participation constrain represent?

Answer 7

The minimum level of incentive that needs to provided to the tenant so that he doesn’t choose an alternative option

Question 8

__________ contract involves the highest degree of income risk for the tenant as the landlord receives a fixed rent and does not bear any risk

Answer 8

Fixed rent

Question 9

__________ contract shifts output risk to the landlord and insure the tenant(worker) against any adverse shock

Answer 9

Wage contract

Question 10

Large farms could potentially have lower productivity due to __________

Answer 10

Incentive problems

Question 11

What are some difficulties of land reform?

Answer 11

Land is immobile,
Could topple governments or intimidate farmers, leading to social unrest
Might discourage investment
Expensive
Might reduce gov credibility in protecting property rights