Practice Midterm II Solutions(1)

# Practice Midterm II Solutions(1) - salaries of the teachers...

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

Practice Midterm II Solutions Question 1 (a) Natural resource abundance raises the return to unskilled labor, discouraging people from accumulating human capital (education) and thereby slowing growth. There is evidence that countries abundant in natural resources have lower school enrollment rates. (b) Removing protection from foreign competition means lowering taxes on imports. These taxes were easy to collect (compared to income taxes, for example), so it was hard for governments to replace the lost revenue with other taxes. Question 2 (a) Detailed studies of firms over time show that exporting firms had high productivity before they began to export. This contradicts the explanation that firms learned to be productive by exporting (b) i. r = Y 1 - Y 0 S ( Y 0 + C ) , where Y 1 = 3400, Y 0 = 1900, S = 5, C = 100. r = 3400 - 1900 5(1900 + 100) = 15% ii. The private return exceeds the social return because students did not have to pay the

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: salaries of the teachers. Question 3 (a) diﬀerence for weekly program = 5 . 2-4 . 1 = 1 . 1 diﬀerence for monthly program = 4 . 5-3 . 9 = 0 . 6 1 diﬀerence in diﬀerence = 0 . 5 diﬀerence in cost between weekly and monthly program = \$5 /student reduction in births per dollar = 0 . 5 / 5 = 0 . 1 (b) i. Expected sex ratio = 1, so 21 million females are expected. 21-20 = 1 million females missing. 1 / 20 = 5% of females are missing. ii. Women live longer than men, so countries with older populations will have lower ratios of males to females even if they do not treat girls better than countries with younger populations. iii. We would like to know the sex ratio at birth. If it is the same as ”expected”, this favors the neglect explanation over the abortion explanation. 2...
View Full Document

{[ snackBarMessage ]}

### What students are saying

• 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.

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

• 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.

Dana University of Pennsylvania ‘17, Course Hero Intern

• 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.

Jill Tulane University ‘16, Course Hero Intern