exam 3 practice questions Flashcards
education of girls is a crucial development investment because
a. it leads to improved child health
b. it leads to reduced fertility
c. women do most of the work in agriculture
d. all of the above
d. all of the above
an individual’s demand for education is most affected by
a. direct and indirect costs of schooling
b. development priorities of the country
c. the desire to escape agricultural work
d. all of the above
a. direct and indirect costs of schooling
concentration of resources on higher rather than basic education in developing countries tends to lead to
a. greater inequality
b. lower fertility
c. less international migration
d. more job creation
a. greater inequality
the annual income that can be consumed without diminishing the total capital assets of a nation is
a. purchasing power parity income
b. sustainable national income
c. environmental capital shock
d. per capita income
b. sustainable national income
human capital is best defined as
a. the amount of wealth people have
b. the amount of money people have to spend on schooling
c. human capacities that raise productivity
d. the average education level of the population
c. human capacities that raise productivity
the world bank approach to combating child labor stresses
a. making child labor legal under certain condition
b. tackling the sources of poverty
c. encouraging families to migrate to richer countries
d. providing each child with a computer so that children have an alternative to working
b. tackling the sources of poverty
the international labor organization (ILO) approach to combating child labor stresses
a. encouraging patents to migrate to the cities in search of work
b. banning child labor
c. tackling the sources of poverty
d. all of the above
b. banning child labor
a major cause of environmental degradation in developing countries is
a. a lack of public transportation
b. poverty
c. land reform
d. none of the above
b. poverty
sustainable development means
a. emphasizing the role of the market
b. emphasizing the role of government
c. meeting the present generation’s needs without compromising the needs of future generations
d. maintaining output growth at a constant rate
C. meeting the present generation’s needs without compromising the needs of future generations
which of the following environmental problems are largely caused by persistent poverty?
a. deforestation
b. soil erosion
c. ground water contamination
d. all of the above
a. deforestation
in what way do developing countries make the largest contribution to the global concentrations of greenhouse gases?
a. vehicle emissions
b. deforestation
c. mining
d. irrigation
b. deforestation
which of the following is an argument in favor of trade liberalization?
a. increased investment
b. infant industry
c. fluctuating export earnings
d. none of the above
a. increased investment
as the number of years of schooling completed increases, the expected private return and private cost of education
a. increase at roughly the same rate
b. increase at different rates with expected private returns increasing at a slower rate than private costs
c. increase at different rates with expected private return increasing at a faster rate than private cost
d. do not increase
c. increase at different rates with expected private return increasing at a faster rate than private cost
the portion of a country’s overall assets that is directly related to the environment, such as forests and soil quality, is known as
a. environmental capital
b. protected areas
c. common property assets
d. none of the above
a. environmental capital
true or false: developed countries use more of the earth’s resources than developing countries
true
imagine a community where child labor is common. using the multiple equilibria model below, explain how banning child labor could ultimately benefit both children and their families.
- the multiple equilibria model shows how child labor enters the labor market as
wages fall, showing the shift from an adult-only workforce to one that includes
both adults and children - AA′ represents the supply curve of adult labor only which is perfectly inelastic
(vertical). - TT′ represents the combined supply of all labor (adults + children).
- wE1 is the wage at the first equilibrium point E1, where only adults work. the wage level is high enough that families do not need to send their children to work
- wE2 is the wage at the second equilibrium point E2, where both adults and
children work. the wage level is low enough that families must send their children to work to survive - the blue S-shaped curve shows how labor supply changes as more children begin to work when wages fall. As wages fall from wH to wL, families start sending their children to work
- initially, when wages decrease from wH to wL, only a few children start working
because most families can still manage without sending them to work - however, as wages continue to drop, more families are forced to send their children to work, causing the curve to flatten as more children join the workforce
- banning child labor reduces the total amount of labor available causing wages to
rise and shifting the economy from the bad equilibrium (E2) to the good equilibrium (E1) without significantly reducing labor demand - this benefits families but employers may now be worse off, because they have to
pay a higher wage - thus, employers may use political pressure to prevent enactment and
enforcement of child labor law
what is human capital, and why is it crucial to expand human capital as part of the developmental process?
human capital is defined as human capacities that raise productivity. in particular, human capital is accumulated, labor productivity rises, which is essential for sustained growth in the economy
how can an increase in human capital lead to an increase in GDP? why might it not lead to an increase in GDP?
- an increase in human capital can improve labor productivity and lower population growth in the long run, which can reduce pressure on resources and allow for greater investment per child (ex: better education and healthcare)
- however, these benefits might not translate into GDP growth if the economy does not create enough jobs for the growing pool of skilled and educated workers. without adequate job opportunities, many may remain unemployed or underemployed, preventing the potential economic gains of higher human capital from being realized
briefly explain the major argument of the Neoclassical (factor endowment trade) theory.
countries tend to specialize in producing commodities that make intensive use of their most abundant factors of production, such as labor or natural resources. the neoclassical (factor endowment) approach to trade benefits examines how a country’s available resources, like labor and capital, determine its comparative advantage in production
what are the drawbacks of overvaluing the exchange rate as an import substitution policy?
an overvalued exchange rate makes exports like agricultural products more expensive for other countries, reducing demand. this discourages exports and can cause a trade deficit.
discuss some of the factors that lead infants manufactured goods industries to become more efficient over time, and some of the factors that might lead them to fall to do so.
infant industries can improve over time through learning by doing- producing more helps them get better, reduce costs, and improve quality. however, some stay dependent on government support, like high tariffs, which protect them from competition. this lack of competition can make them inefficient and stop them from growing
given the following values:
GNI = 100 billion rupees
Depreciation = 20 billion rupees
Natural resource degradation = 10 billion rupees
Restoration expenditure (R) = 5 billion rupees
Averting expenditure (A) = 5 billion rupees
NNI* (sustainable net national income) = GNI - Dm -Dn
= 100 billion - 20 billion - 10 billion = 70 billion
NNI** (revised NNI) = GNI - Dm - Dn - R - A
= 100 billion - 20 billion - 10 billion - 5 billion - 5 billion = 60 billion
