ACE 251 F17 D12. Review Final.pdf

ACE 251 F17 D12. Review Final.pdf - ACE 251 Review Session...

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ACE 251 Review Session Final Exam
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Announcements Final Exam: Friday (Dec. 15) 7-10pm CLOSED BOOK You can bring 1 SHEET OF PAPER WITH NOTES MULTIPLE CHOICE QUESTIONS: 40-50 questions Bring a CALCULATOR
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Grade 50% Midterms + Final (drop the lowest score, including final) 30% Project 10% Worksheets 10% Attendance (5% Discussion + 5% Lectures)
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Demographics
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Demographic Recap Measurement and Status 1. Crude Birth Rate ( CBR ): Live births per 1,000 in pop. (year) 2. Crude Death Rate ( CDR ): Deaths per 1,000 in pop. (year) 3. Rate of Natural Increase ( RNI ): % change in population excluding immigration: 4. Doubling Time : Rule of 70: 70/growth rate = doubling time ( roughly ) 5. Total Fertility Rate (TFR): Average number of live births per woman over her lifespan Replacement fertility rate (about 2.1) is the total fertility rate at which adults have just enough children to replace themselves => zero pop growth, eventually… 6. Dependency Ratio: ??𝑰 = ??? − ??? ?? ???. ?𝒂?𝒊? = (𝑷??. ????? ????? + 𝑷??. ???? ?????) 𝑾??𝒌𝒊?? 𝒂?? ???.
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Demographic Transition Recap High CDR High CBR Low RNI (stable) Falling CDR High CBR Rising RNI Low CDR Falling CBR Falling RNI Low CDR Low CBR Low RNI (stable) “High Stationary” “Early Expanding”/ “Population Explosion” “Late Expanding” “Low Stationary” Guiding numbers for RNI: Stage 1: <1% and stable Stage 2: >2.5% and recently rising Stage 3: <1-2.5% and falling Stage 4: <1% and stable Tip: to determine the transition stage, look at the trends for CBR, CDR and RNI, not only at the last period
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Elasticities
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Elasticities Elasticity : measures how much one variable reacts to changes in another variable Income Elasticity : 𝜂 𝑖 > 0 : normal good (e.g. apples, oranges) 𝜂 𝑖 > 1 : luxury good (e.g. meat) 0 < 𝜂 𝑖 < 1 : necessity good (e.g. grains, rice) 𝜂 𝑖 < 0 : inferior good (e.g. ramen noodles) 𝜂 𝑖 = %Δ ???𝑎?? ??? ???? 𝑖 %Δ 𝐼????? = ? 𝑖 ?𝑁? − ? 𝑖 ????? ? 𝑖 ????? ∗ 100 ? ?𝑁? − ? ????? ? ????? ∗ 100
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Laws on Food Consumption Patterns Engel’s Law The percentage of income spent on food in aggregate (not specific kind of food) declines as income rises. BECAUSE YOU CAN ONLY EAT SO MUCH share declines total spending increases
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Laws on Food Consumption Patterns Bennett’s Law The percentage of calories from starchy staples declines as income rises. BECAUSE OTHER (MORE EXPENSIVE THINGS) TASTE GOOD Engel’s Law Implication of Bennett’s Law
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Food Demand Equation ? : percent growth in demand for food ? : percent growth in population ? : percent growth in per capita income 𝜂 : income elasticity of demand for food ? = ? + (? ∗ 𝜂) Food demand growth = pop growth + food spending growth per capita 𝜂 = %Δ ???? ??? ?𝑎?𝑖?𝑎 %Δ 𝑖????? ??? ?𝑎?𝑖?𝑎
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Elasticities Own Price Elasticity : 𝜉 𝑖 < 0 : ordinary good (e.g. apples, oranges) 𝜉 𝑖 > 0 : Giffen good (e.g. Irish potato famine in the 19 th century) Giffen goods are very inferior goods , so when prices increase, although the substitution effect reduces demand, the income effect is stronger and drives demand up.
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