{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Econ416PS3 - Theory of Economic Development Econ 416 Spring...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Theory of Economic Development Econ 416, Spring 2010 Problem Set 3 NOTE: Please provide short answers to each question in the space provided! Due at the beginning of lecture on April 27th 1. In deciding how many children to have, suppose that each couple weighs the costs and benefits of having children and selects the number of children that maximize the net private benefits (where net private benefits is equal to the private benefits minus the  private costs). (a) Given the benefit and cost functions below, please draw a vertical line through the graph at the number of children where the couple’s net private benefits are maximized. (Label this point A). Make sure you show why you selected this point on the graph. 
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
(b) Now suppose that this couple lives in a country where the government provides free health care and education for all children. Thus each additional child raises 
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}