{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Midterm 2 Answer Key

Midterm 2 Answer Key - Midterm 2 Answer Key Econ 114 Summer...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Midterm 2 Answer Key Econ 114, Summer 2010 Multiple Choice Questions Version A Version B 1. C 1. B 2. D 2. C 3. C 3. C 4. A 4. D 5. A 5. D 6. B 6. B 7. B 7. B 8. D 8. C 9. B 9. B 10. B 10. D Short Answer Questions Economic development tends to be accompanied by extensive migration from rural to urban areas. This problem has to do with the importance of labor mobility between sectors. (12 points) a. When more than L* people work in sector 2, the MPL 2 < MPL 1 . This means that each worker after L* could be producing more output working in sector 1 than in sector 2. This will result in a lower wage for workers in sector 1, and a loss in productivity in the economy. b. People in low income countries tend to depend on family networks for insurance against income risks. The importance of family networks in low income countries will increase the cost of moving away from family in order to work in a different sector, resulting in a misallocation of workers across sectors.
Image of page 1

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

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern