Explain what is meant by urban bias. What are the major effects of urban bias?
What will be an ideal response?
Developing country policies that favor the urban sector with a disproportionate share of investments in infrastructure, factories, buildings, and education. This creates a widening gap in incomes and amenities between urban and rural economies and induces rural-urban migration.
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When government corrects a market with an externality present by allowing participants to buy up to the point where their net benefit is zero, they must be:
A. imposing a tariff. B. offering a Coase tax. C. mandating a quota. D. imposing a tax.
In the long run, each perfectly competitive firm produces at the lowest point on
a. its short-run average total cost curve b. its long-run average total cost curve c. its marginal cost curve d. both its short-run and long-run average total cost curves e. both its short-run average cost curve and its marginal cost curve
If the output of a firm is increased by one unit, the revenue addition is called
a. total revenue. b. average revenue. c. marginal revenue. d. economic profit.
If a large decrease in rent leads to a firm cutting back on the labor it uses,
A. the output effect outweighs the substitution effect. B. the substitution effect outweighs the output effect. C. the substitution and output effects are equal. D. there is no way of determining the relative strengths of the output and substitution effects.