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Answer option C)
labor supply is unlimited, like clasical model , at a given wage rate , hence it is perfecfly Elastic , like classical model
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4. The Lewis model is considered to be a "classical" model of development because: a. The...
4. (a) What are the main features of the Harris-Todaro model of rural-urban migration? (b)...
4. (a) What are the main features of the Harris-Todaro model of rural-urban migration? (b) Suppose the rural wage is $1 per day. Urban modern sector employment can be obtained with 0.5 probability and pays $2 per day. Will there be any rural-urban migration? Explain your reasoning, stating explicitly any simplifying assumptions, and show all work. 5. Suppose that, for example in India, a minimum wage is instituted in the modern sector above the market clearing wage, while the...
This question is on lewis model. Production in the modern gector Real Wage 2 kg of...
This question is on lewis model.
Production in the modern gector Real Wage 2 kg of food Labor demand curve 20 Million workers kil) In the modern sector, where the production decisions are guided by profit motive, the real wage rate in the quantity of food is 2 kilograms per worker. Then, how many workers are employed in the modern sector? Recognize the area in the graph, which represents profit in the modern sector that can be invested to raise...
there two question 1. in the lewis model, how are the real wage rates determined in...
there two question 1. in the lewis model, how are the real wage rates determined in the modern sector ？ 4 . Describe four stages of demographic transition in a typical LDC and compare them with the stages of demographic transition in Western Europe •Stage I: Birth rate constant over time and higher than death rate, which fluctuates. •Stage II:Birth rate constant over time and higher than death rate, which starts to decline. •Stage III:Birth rate starts to decline, but...
1 (Specific Factor Model, Chapter 3) In the simple" version of the specific factor model, there...
1. (Specific Factor Model, Chapter 3) In the "simple" version of the specific factor model, there are two sectors (goods), one factor (labor) that is perfectly mobile between the two sectors, and one fixed - or specific - factor in each sector. To be concrete, suppose the two goods are food and clothing, the specific factor in food is "land" - represented by "T", and the specific factor in clothing is "capital", represented by "K'. The production functions for each...
QUESTION 20 In the classical model, if the real interest rate is lower than the equilibrium...
QUESTION 20 In the classical model, if the real interest rate is lower than the equilibrium interest rate in the goods market, then total demand for goods is A. higher than the total supply. B. lower than total supply. C. can be equal to total supply. D. none of the above. QUESTION 21 In the classical model, if total demand for goods is less than total supply, then real interest rate will A. fall. B. rise. C. may remain the...
7. The gross domestic product (GDP) in a Fultonland in 2012 is S8 billion. The income...
7. The gross domestic product (GDP) in a Fultonland in 2012 is S8 billion. The income received in 2012 by Fultonland residents from investment in Kingsland is S1 billion. The income received in 2012 by Kingsland residents from investments in Fultonland is S500 million. Using these abovementioned figures, the gross national income (GNI) for Fultonland in 2012 is: a S8.5 billion b. $8.6 billion c. $8.41 billion d. cannot be determined from the information given. 8. According to the Lewis...
According to the Classical model, what happens when there is a recessionary GDP gap? (check all...
According to the Classical model, what happens when there is a recessionary GDP gap? (check all that apply) a.The economy self-adjusts back to potential GDP b.The economy stays in recession unless the government acts to increase aggregate demand c.An excess supply of labor causes wage rates to fall d.The price level rises e.An excess demand for labor causes wage rates to rise What are the implications of wages being "sticky downward"? (check all that apply) a.Employers will lay off workers...
Specific Factor Model 3. Specific factor model a. Why is the specific-factors model referred to as...
Specific Factor Model
3. Specific factor model a. Why is the specific-factors model referred to as a short run model? b. An economy can produce good 1 using labour and captal and good 2 using labour and land. The total supply of labour is 100 units. Given the supply of capital, the output of the two goods depend on labour input as follows: Labor Input to GoodI Labor Input to Good 2 Output of Good 2 0.0 39.8 52.5 61.8...
7. Suppose a shock hits the economy that abides by a Classical model and you observe...
7. Suppose a shock hits the economy that abides by a Classical model and you observe the following changes: . Overall output increases . Marginal productivity of workers decrease Which of the following could lead to these observations? A. Flood in Minnesota, which destroyed the production facility. B Invention of personal computers C. A huge lake was drained and new fertile land was revealed D. Immigrants get working visas and join the labor force. 8. Consider the labor demand curve...
Assignment #4 40 70 1. The graph drawn above is related to the Harris-Todaro model of...
Assignment #4 40 70 1. The graph drawn above is related to the Harris-Todaro model of rural to urban migration. The curve RR' is the demand curve for rural labor and the curve UU' is the demand curve for urban labor. These demand curves show the marginal productivity of labor on the vertical axis. The economy has 100 million urban and rural workers, who are looking for jobs. Assume that the labor markets are perfectly competitive. () Then what would...
This question is on lewis model.
Production in the modern gector Real Wage 2 kg of food Labor demand curve 20 Million workers kil) In the modern sector, where the production decisions are guided by profit motive, the real wage rate in the quantity of food is 2 kilograms per worker. Then, how many workers are employed in the modern sector? Recognize the area in the graph, which represents profit in the modern sector that can be invested to raise...
QUESTION 20 In the classical model, if the real interest rate is lower than the equilibrium interest rate in the goods market, then total demand for goods is A. higher than the total supply. B. lower than total supply. C. can be equal to total supply. D. none of the above. QUESTION 21 In the classical model, if total demand for goods is less than total supply, then real interest rate will A. fall. B. rise. C. may remain the...
7. The gross domestic product (GDP) in a Fultonland in 2012 is S8 billion. The income received in 2012 by Fultonland residents from investment in Kingsland is S1 billion. The income received in 2012 by Kingsland residents from investments in Fultonland is S500 million. Using these abovementioned figures, the gross national income (GNI) for Fultonland in 2012 is: a S8.5 billion b. $8.6 billion c. $8.41 billion d. cannot be determined from the information given. 8. According to the Lewis...
Specific Factor Model
3. Specific factor model a. Why is the specific-factors model referred to as a short run model? b. An economy can produce good 1 using labour and captal and good 2 using labour and land. The total supply of labour is 100 units. Given the supply of capital, the output of the two goods depend on labour input as follows: Labor Input to GoodI Labor Input to Good 2 Output of Good 2 0.0 39.8 52.5 61.8...
7. Suppose a shock hits the economy that abides by a Classical model and you observe the following changes: . Overall output increases . Marginal productivity of workers decrease Which of the following could lead to these observations? A. Flood in Minnesota, which destroyed the production facility. B Invention of personal computers C. A huge lake was drained and new fertile land was revealed D. Immigrants get working visas and join the labor force. 8. Consider the labor demand curve...
Assignment #4 40 70 1. The graph drawn above is related to the Harris-Todaro model of rural to urban migration. The curve RR' is the demand curve for rural labor and the curve UU' is the demand curve for urban labor. These demand curves show the marginal productivity of labor on the vertical axis. The economy has 100 million urban and rural workers, who are looking for jobs. Assume that the labor markets are perfectly competitive. () Then what would...
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