In defining development to include more than just the growth of per capita income, there is an implicit assumption that the growth of per capita income alone is not sufficient to guarantee the reduction of poverty and the growth of self-esteem
Is it possible that there could be growth of per capita income without the achievement of these other objectives?
Per capita income can show growth even when that growth does not touch vast portions
of the population. This point is clearly made in Chapter 5 . The growth may be centered in one area or sector of the economy for example. Also, most developed countries have, at some time in their histories, introduced policies emphasizing equality.
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Every social system confronts scarcity and therefore must
A. produce only free goods. B. try to produce outside its production possibilities frontiers. C. economize. D. allocate goods by government edict.
If the value of the marginal product of physical capital is $20 and the value of the marginal product of labor is $5, the highest price that a firm should pay for an additional unit of physical capital is:
A) $4. B) $5. C) $20. D) $100.
Answer the following questions true (T) or false (F)
1. A common mistake made by consumers is the failure to take into account the sunk costs of their actions. 2. The endowment effect is the tendency of people to be unwilling to sell a good they already own even if they are offered a price greater than they would be willing to pay to buy the good if they did not already own it. 3. Behavioral economics is the study of situations in which people make rational choices.
Refer to the given data. Which of the following would be feasible terms of trade between Landia and Scandia?
Answer the question on the basis of the following production possibilities data for Landia and Scandia:
A. 1 fish for 4 chips.
B. 1 fish for 6 chips.
C. 1 fish for 7 chips.
D. 2 fish for 4 chips.